Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — WENVOE TELEVISION STATION

Mr. Peter Freeman: asked the Assistant Postmaster-General what areas will be covered by the new television station at Wenvoe; and during what periods it will be operative.

The Assistant Postmaster-General (Mr. David Gammans): The BBC. expects that the boundary of the service area of the new television station at Wenvoe will be approximately along a line through Barnstaple, Tiverton, Teignmouth, Swanage, Marlborough and Gloucester, and slightly to the north of Brecon, Carmarthen and Tenby. Some parts of the country within this line are mountainous, and the quality of reception may vary considerably from place to place. Reception near the boundary of the estimated service area will depend very much on local conditions. During the initial period when the station is working on low power, reception will be more liable to interference, particularly in the fringe areas. The station will normally work during the same hours as the existing television stations.

Mr. Freeman: Could the hon. Gentleman tell us to what extent that interference will be serious in the areas which are overlapping between the Midland station and the Wenvoe station?

Mr. Gammans: I do not think we shall know exactly until the station is in full operation, but the B.B.C. has no reason to suppose that it is likely to be serious.

Mr. Ness Edwards: Could the hon. Gentleman tell us how soon the high-powered station will be functioning?

Mr. Gammans: The B.B.C. does not yet know, but in the case of the other stations which started as low power stations and then went on to high power it was about three months.

Oral Answers to Questions — TELEPHONE SERVICE

Toll and Trunk Calls

Mr. Ian Harvey: asked the Assistant Postmaster-General how long it now takes to make a toll and a trunk connection, respectively; and how this compares with this time last year.

Mr. Gammans: In the three months ending 31st March the average times from the start of toll and trunk calls until the called subscriber answered were 46 and 90 seconds, respectively, as compared with 49 and 102 seconds in the same three months last year.

Mr. Ness Edwards: Can the hon. Gentleman say how far this is due to the fact that the Post Office has got more staff?

Mr. Gammans: That is the chief reason, and also the greater stability of staff.

Kiosks, Cardiff and Hexham

Mr. G. Thomas: asked the Assistant Postmaster-General when he expects to be able to reply to the representations made on 22nd May last by the hon. Member for Cardiff, West, concerning the petition by residents at the Disabled Centre, Haig Place, Cardiff, to have a telephone kiosk installed in that area.

Mr. Gammans: I wrote to the hon. Member on 12th June.

Mr. Thomas: Is the hon. Gentleman aware that he sent me a quite unsatisfactory reply, and is he further aware that this Disabled Centre is situated on a hill much more than the 600 yards he mentioned in his letter from the nearest telephone? Will the hon. Gentleman look at this matter again, because there is a genuine grievance in this case?

Mr. Gammans: I admit that the reply was unsatisfactory in a sense. I should very much like to have told the hon. Gentleman that I could provide him with the facilities for which he asks, but, as I told him in my reply, I shall certainly provide those facilities at the earliest possible moment.

Mr. Thomas: When will that be?

Mr. Speir: asked the Assistant Postmaster-General whether he is now in a position to supply a list of the places in the Hexham Division of Northumberland, in which it is proposed to erect public telephone kiosks by 31st March, 1953, and, in particular, whether Settlingstones will be included in that list.

Mr. Gammans: I regret not. The telephone manager is in correspondence with the county branch of the Rural District Councils' Association about the list for the Hexham area and I will write again to my hon. Friend as soon as I have any definite information.

Mr. Speir: Does my hon. Friend realise that he referred to this list in a letter to me last March; and, as he is still unable to give the details, does not this continual inability to provide the details reflect somewhat on the competence of his Department?

Mr. Gammans: Well, I trust not. The position is that we ask the Rural District Council's Association to advise us where these kiosks should go, and in this particular case no agreement has finally been reached with the Association. I can assure my hon. Friend that we shall certainly get on with this as quickly as we can get agreement on this point.

Local Directories

Mr. Russell: asked the Assistant Postmaster-General how many local telephone directories are being published by his Department in the North-West London area; and if he will give details of their cost of production and purpose, and the policy on which their publication is based.

Mr. Gammans: Four. The total cost of the current issues of these was about £5,000, but revenue amounting to nearly half of this sum was obtained from advertisements. Local directories are provided at the discretion of the Post Office Regional Director in areas where they are likely to be of special convenience to subscribers.

Mr. Russell: Is it the policy of my hon. Friend's Department to publish local directories in competition with private enterprise? If so, is it his policy to get as many advertisements as possible? Is he aware that in Wembley there is one published with far more advertisements

than corresponding local directories in the neighbouring area?

Mr. Gammans: The Post Office provide local directories, where they are satisfied they will be of use to the public as a whole, after consultation with chambers of commerce, local authorities and other bodies who are able to offer an opinion.

Oral Answers to Questions — POST OFFICE

Staff Associations (Terrington Report)

Lieut-Colonel Lipton: asked the Assistant Postmaster-General what action is being taken on the Terrington Report.

Mr. N. Macpherson: asked the Assistant Postmaster-General whether he will now make a statement on the policy of Her Majesty's Government in regard to the recognition of staff associations within the Post Office.

Mr. Gammans: I hope to make a statement at a very early date.

Lieut.-Colonel Lipton: Why is the hon. Gentleman not able to keep the promise he made a week or two ago that he would make an announcement today? What is holding up a decision in this matter? Is he finding it difficult to abandon some of the arguments he was advancing so strenuously a few months ago on the subject of trade union recognition in the Post Office?

Mr. Gammans: No. The explanation is not nearly so romantic as that.

Mr. Macpherson: Is my hon. Friend aware that he did say he was going to make an announcement this week? While appreciating the difficulties involved, may I ask him if there is any change in that intention?

Mr. Gammans: I was hoping to be able to make a statement today, but for a variety of reasons, of which one is that a statement on another subject is being made today, I am unable to do so.

Temporary Porter

Mr. F. Maclean: asked the Assistant Postmaster-General under what circum stances Mr. A. Adewale, who can neither read nor write, was employed as a sorter in a General Post Office sorting office.

Mr. Gammans: Mr. Adewale was only employed as a Christmas casual porter in 1949. His employment lasted two days.

Mr. Maclean: Was he employed as a sorter or as a porter?

Mr. Gammans: He was employed as a porter.

Mr. Ness Edwards: Will the hon. Gentleman discourage his hon. Friend from putting down such Questions, which cost us so much money?

Stamp Books

Mr. Peter Freeman: asked the Assistant Postmaster-General whether he will issue 5s. books of stamps containing six each of ½d., 1d., 1½.d. and 2d. and 12 2½d. stamps, in view of the general demand for 1½d. and 2d. stamps by the public.

Mr. Gammans: The composition of the 5s. books. which now contain stamps at ½d., 1d., 1½d. and 2½d., was changed as recently as March last after consultation with the Post Office Advisory Council, and I do not think a second alteration is warranted at this juncture. The hon. Member's proposal will, however, be borne in mind.

Mr. Freeman: Is it not a fact that practically everybody uses a 2d. stamp every day of their lives, because it is compulsory to use them on receipts and written postcards; and would not 2d. stamps in this book be a very great convenience, and save using two stamps at greater expense to the Post Office and great inconvenience to the public?

Mr. Gammans: There has not been any complaint on a large scale. We sell a million of these books a week; only 38 people have written in complaining and of the 38 only eight support the hon. Gentleman's contention.

New Stamp Issue

Mr. Crouch: asked the Assistant Postmaster-General when the new issue of stamps for the new reign will be available to the public.

Mr. Gammans: I hope that some of the permanent stamps of the new reign will be on sale by the end of this year.

Mr. Crouch: Is my hon. Friend aware that this announcement will be received

with very great pleasure and interest by a very large section of the community, particularly those interested in the collection of stamps?

Air Postage Rates

Mr. Janner: asked the Assistant Postmaster-General whether he is aware that the increase of 50 per cent. on airmail post places a considerable burden on firms trying to obtain export business who have to use the airmail sample post; and whether he will introduce a special all-in fixed charge for such airmail.

Mr. Gammans: The increased air postage rates which came into force on 1st May only just cover the cost of the service which previously was running at a loss. I regret therefore that I cannot adopt the hon. Member's suggestion.

Mr. Janner: Is the hon. Gentleman or is he not anxious to increase exports, particularly of textiles, from this country; and, if so, why does he not do something about subsidising this, if necessary, so that firms who can export these textiles and other commodities can deal quickly with the demands of those in other countries?

Mr. Gammans: Naturally the Government are anxious to help the export trade as much as possible but, as I have told the hon. Gentleman, this particular service was running at a substantial loss.

Mr. Janner: While I appreciate the reply the hon. Gentleman has given, may I ask whether he realises that some firms use this service almost entirely for the purpose of getting business; that they have to be speedy in sending their samples, and so on, and that this is really placing a tremendous imposition on them?

Mr. Gammans: I realise that all right, but I also realise that this service was running at a substantial loss.

Mr. Attlee: Surely the hon. Gentleman knows that there are many parts of the postal service which run at a loss. For instance, the whole of the telephone service of Scotland is a dead loss. We do it for the benefit of the country. I always understood that was a Post Office principle.

Mr. Gammans: So it is, but it is the telegraph service which runs at a loss. Taking the country as a whole, the telephone service does not run at a loss.

Mr. Beswick: When the hon. Gentleman says it is running at a loss, does he mean at a loss to the Post Office or to the airways corporations?

Mr. Gammans: A loss to the Post Office.

Mr. Hale: Is the hon. Gentleman aware that if he had accepted our Amendment on the Post Office and Telegraph (Money) Bill he would not have to make this charge at all?

Oral Answers to Questions — B.B.C. CHARTER (NORTH-EAST COAST)

Mr. Speir: asked the Assistant Postmaster-General whether he will give an assurance that wider autonomy will not be given by the new Charter to the Northern Ireland regional authorities of the British Broadcasting Corporation so long as the north-east of England is compelled to share the Northern Ireland Regional programmes.

Mr. Gammans: The draft Charter for which my noble Friend proposes to apply provides that the B.B.C. controllers in the English regions and in Northern Ireland shall be given a reasonable measure of independence in respect of programmes. In practice, the controllers already have all but complete autonomy in programme matters. The draft Charter provides that a broadcasting council may be established in Northern Ireland, but I understand that the Government there do not want such a council at present. If such a council were set up it would be open to the Governors of the B.B.C. to make reservations which would safeguard the interests of those listeners in the North of England who share the Home Service programme with listeners in Northern Ireland.

Mr. Speir: While thanking the Minister for his reply, which will give satisfaction in the North-East, may I ask whether he appreciates that it would give greater satisfaction if he could tell us the date when a separate wavelength will be restored to the North-East?

Mr. Gammans: As my hon. Friend knows, the only real solution to this problem is very high frequency. As the House is aware, my noble Friend has given a promise that the highest priority will be given to the North-East coast in providing a very high frequency station.

Captain Orr: Would my hon. Friend bear in mind that we do not want any wider autonomy in broadcasting matters in Northern Ireland; that we dislike the sharing of a wavelength just as much as my hon. Friend the Member for Hexham (Mr. Speir); and, in view of the deterioration of the reception in Belgium on 424 metres, would the Assistant Postmaster-General consider using that frequency?

Mr. Gammans: I am afraid that is a technical question of which I should want notice.

Oral Answers to Questions — ROYAL AIR FORCE

Personal Cases

Mr. Hale: asked the Under-Secretary of State for Air for what reason the Oldham man, to whose name he has been referred, who was a qualified butcher and was employed as a butcher throughout his two years' service in the Armed Forces and who is now in civilian employment as a butcher, is being called up for 15 days' Z training; and what training he will receive.

The Under-Secretary of State for Air (Mr. George Ward): As I explained to the hon. Member in my letter of 8th May, this man is not being called up as a Class Z or Class G reservist, but in accordance with his statutory obligations for part-time National Service. During his fortnight's call-up he will be employed in his whole-time National Service trade of Cook II and will help the permanent staff at a Royal Air Force Station to carry out the extra domestic work caused by the call-up of Class G reservists for operational refresher training.

Mr. Hale: What is the precise advantage to the nation or to National Service of calling up a man to perform the same duties as he is usefully performing in Oldham, of depriving an important shop of his services, of transporting him 200 miles by rail and many miles by road, and then telling him that, never having used his services as a soldier at all during two years of service, the Government are now going to give him a bit more experience of his own occupation?

Mr. Ward: This man is still a National Service man with a statutory obligation to the Royal Air Force, and he is going to be employed as he was employed during his full-time service, as a cook and not solely as a butcher.

Mr. J. Hudson: Why does not the Under-Secretary tell my hon. Friend that this man will be engaged in cutting up the red meat that was promised?

Mr. Peter Freeman: Will the hon. Gentleman consider giving this man training as a vegetarian cook?

The following Question stood upon the Order Paper:

MR. BROCKWAY: TO ask the Under-Secretary of State for Air, if he will provide facilities for free air passage to Leading Aircraftman J. Sextou, a national serviceman serving in the Middle East, to attend the World Solo Accordion Championship contest at Scheveningen, Holland, in September, in view of his placing in the All Britain Solo Accordion Championship.

Mr. Brockway: May I draw attention, Mr. Speaker, to the fact that the name should be Leading Aircraftman J. Sexton, a good British name?

Mr. Ward: This case has been most sympathetically considered, but it is not possible to grant a free air passage to Leading Aircraftman Sexton in order to take part in this contest.

Mr. Brockway: May I point out that, while one has the greatest desire that compassionate cases should not be prejudiced, the Commanding Officer has given a fortnight's leave so that Leading Aircraftman Sexton can take part in this world competition? It is only a matter of a place on the aircraft, and, in view of that fact, will the hon. Gentleman reconsider his decision?

Mr. Ward: No, Sir. The normal tour of duty abroad is for two and a half years only, and no provision for leave in the United Kingdom at the public expense is made, except on urgent compassionate grounds. To grant this man a free passage for this purpose would be grossly unfair to those borderline compassionate cases which we often have to refuse.

Mr. W. R. Williams: Would it not be better for Mr. Sexton if he turned his attention to football or cricket?

Jet Aircraft Accidents (Report)

Mr. A. Henderson: asked the Under-Secretary of State for Air whether he will make a statement on the report

of the Inspector-General of the Royal Air Force following his investigation into jet aircraft accidents.

Mr. Ward: As I informed the hon. and learned Member on 28th May, the fatal accident rate for jet aircraft is now lower than that for comparable piston-engined types. Experience has shown that the prevention of accidents to jet aircraft requires measures of the same kind as with piston-engined aircraft, i.e., close attention to methods and standards of training, constant improvement of equipment and expert supervision of flying and maintenance.
The Inspector-General's report makes a number of detailed recommendations in these fields, for example, the prompt introduction of modifications to equipment. The report has been fully considered by the Air Council, and several of its recommendations are already being implemented. Others, especially in the equipment field, can only be realised in the course of time.

Mr. Henderson: Does the Inspector-General recommend the use of an intermediate jet trainer?

Mr. Ward: Yes, Sir. But there is every indication at the moment that the dual Vampire will be an excellent dual trainer.

Oral Answers to Questions — CIVIL AVIATION

South Bank Site (Helicopters)

Lieut.-Colonel Lipton: asked the Minister of Civil Aviation what further progress has been made in the provision of landing facilities for helicopters on the South Bank site.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Maudling): Discussions on this matter are still proceeding, but I am not yet able to say when a final decision will be made. As the hon. and gallant Member is no doubt aware, the question of an airstop is only one element in the much larger and more difficult issue of the future use and development of the South Bank.

Lieut.-Colonel Lipton: Can the Minister say with whom these discussions are taking place and when it is likely that they will be brought to some sort of conclusion?

Mr. Maudling: Discussions are taking place between the various authorities interested in the future of the South Bank. I would not like to give any definite date for their conclusion. We are well aware of the importance of developing the helicopter and the importance of making sure that we are not crowded out in this matter.

Gatwick Airport

Mr. Beswick: asked the Minister of Civil Aviation if a decision has yet been made about the development of Gatwick Airport as the alternate airport in the London area.

Mr. Maudling: My right hon. Friend hopes to be able to make an announcement soon.

Mr. Beswick: Is the Parliamentary Secretary aware that when the present administration was set up one of the first things that the new Minister said, six months ago, was that he was hoping to make a statement soon about this alternate airport, and can he say, if a decision is not made this year, whether it is certain that there will be an alternate airport ready when Northolt is closed for civil operations?

Mr. Maudling: We are aware of the importance of getting an early decision, and my right hon. Friend hopes to make an announcement very soon.

Fog Dispersal, London

The following Question stood upon the Order Paper:

MR. BESWICK: To ask the Minister of Civil Aviation if a decision has yet been made about the installation of Fog Investigation Dispersal Operation landing aid at London Airport.

Mr. Beswick: In my original Question I contented myself with using the initials F.I.D.O., which, I understand, stand for the words Fog Intensive Dispersal Of and not for the words on the Order Paper.

Mr. Maudling: I always thought that stood for F.I.D.O.
The technical and economic factors involved are very complex and are being studied in consultation with technical experts and airline operators.

Mr. Beswick: Does not the Parliamentary Secretary remember that his right hon. Friend, the present Minister of Fuel and Power, whipped hon. Members opposite into a state of excitement similar to that with which they greeted the ending of this year's Budget speech, when he demanded that we must have F.I.D.O. at London Airport for the winter 1951–52, and what is the present Minister of Fuel and Power doing about this delay?

Extensions, London Airport

Mr. Beswick: asked the Minister of Civil Aviation when a decision will be made about the extension of London Airport over the Bath Road, which is estimated to involve the destruction of 650 residential properties and 15 other properties, including churches, schools, business and industrial premises.

Mr. Maudling: A final decision on the extension of London Airport must await practical experience in the use of the dual runway system, which will not come into full operation until late in 1953. While I regret the inconvenience this must cause to residents in this area, I cannot say when a decision will be reached. In any case no property will be disturbed before 1955.

Mr. Beswick: While I appreciate that this is a most complex problem and not one on which we should try to score party points, may I ask the Parliamentary Secretary if he is aware that there are some hundreds of families involved here who just do not know what to do with their homes? There are millions of pounds of constructional work involved, and there is grave disquiet that the present Government appear to be treating this as a spare-time problem for Ministers. Does not the Parliamentary Secretary think that he would be better employed studying this matter rather than taking over the Finance Bill for the Treasury?

Mr. Maudling: I can assure the hon. Member that we are well aware that this must cause grave inconvenience to the people living in the area but, as he is himself well aware, it is impossible to predict with certainty the development of air traffic. We are anxious to reach a decision as soon as possible, but it


would be most unwise to reach a premature decision which would be a wrong one.

Mr. Nabarro: There is general agreement in regard to the necessity for a substantial enlargement of London Airport, and in those circumstances is it desirable that normal housing development should continue in the immediate proximity of the sites scheduled for airfield development? Has that aspect of the matter been considered?

Mr. Maudling: Undoubtedly there must be development, and there is a good deal of development going on at London Airport, but this Question refers to the extension over the Bath Road to take in properties on the other side of the road, and that is rather a different point.

Mr. Rankin: When the party opposite were on this side of the House they made a great song and dance about all these matters. Why are they so quiet about them now when they have an opportunity of going ahead with them?

Oral Answers to Questions — OVERSEAS INFORMATION SERVICES

Mr. Profumo: asked the Secretary of State for Foreign Affairs whether the consultations between the British Broadcasting Corporation, the British Council and the Government Departments concerned, regarding the political and strategic aspects of our overseas information services, have yet been concluded; and if he will now make a statement.

The Joint Under-Secretary of State for Foreign Affairs (Mr. Anthony Nutting): These consultations are still taking place, and I do not think that I can usefully make any statement at this stage.

Mr. Profumo: While appreciating that there is a great deal of ground to be covered in these consultations, may I ask if my hon. Friend can give any indication of when the Committee will be able to publish its findings?

Mr. Nutting: I very much hope that the Committee of Inquiry will have concluded its deliberations by the end of next month, but I do not want to give any firm undertaking to the House because,

as the House will realise, this is a very wide field which covers matters connected not only with the Foreign Office but with other Departments.

Oral Answers to Questions — WORLD PEACE

Mr. S. Silverman: asked the Secretary of State for Foreign Affairs whether Her Majesty's Government will call a conference of the Great Powers, including India and China, to consider all matters now threatening world peace in the Far East.

The Secretary of State for Foreign Affairs (Mr. Anthony Eden): Her Majesty's Government hope that there will be an armistice in Korea followed by discussions on the political settlement in that country. They consider that the most hopeful course is to try to settle the Korean question first and so prepare the way for the settlement of other problems in the Far East.

Mr. Silverman: While I am grateful for the tone of the right hon. Gentleman's reply, may I ask him whether it is not the case that the cessation of hostilities in Korea is now apparently at deadlock on one point on which a great many people are doubtful whether we are right, and it would be a great pity if a real discussion between all the parties most closely concerned on all matters at issue in the Far East were to be indefinitely postponed while this question of the prisoners on Koje Island is in a position of deadlock?

Mr. Eden: I am not quite sure that I accept all the hon. Gentleman's premises in that interesting supplementary. It is quite true that there is this problem of the prisoners of war which is holding up progress, but I am not without hope that some solution of that matter may ultimately be found, and I am quite sure that is the way we had better proceed, because if we can resolve that we can approach these other problems in a different atmosphere, and without resolving that I am afraid that other difficulties may be too great for us.

Mr. Fernyhough: When the right hon. Gentleman says that he hopes that there will be an armistice in Korea, does he not realise that many people in this country believe that the hopes would be


brighter if the British Government had been directly represented at the talks now going on?

Mr. Eden: There are other questions on the Order Paper about that, and I would not myself say that was the only criterion we have to judge by.

Oral Answers to Questions — SECURITY COUNCIL (CHINA)

Mr. S. Silverman: asked the Secretary of State for Foreign Affairs what steps he proposes to take to secure the representation on the Security Council of the de factoGovernment of China, in view of the fact that in the absence of such representation doubt has been cast on the legality of the Council's decisions under the Charter.

Mr. Eden: The present Chinese representative on the Security Council is properly accredited in accordance with the Rules of Procedure of the Council. There can, therefore, be no doubt as to the legality of the Council's decisions.

Mr. Silverman: Does not the right hon. Gentleman realise that, whatever the truth about this purely legal question may be—and there are considerable doubts about it—nevertheless the whole idea of the Charter, which established the Security Council, was to make certain that there were not differences of opinion on policies of the United Nations among those actually able to speak in the name of the five great Powers, of whom China was one, and that it is really no answer to all the people in the Far East, who are now in the course of a vast revolution, to tell them that they are being adequately and legally represented by somebody in whom they have no confidence whatever, and who speaks for no Far Eastern nation?

Mr. Eden: However that may be, the hon. Member's Question asked me about the legality of the Council's decision, and that is the question I have answered. As to the wider question, I am in complete agreement with my predecessor's observations of last June, which I may, perhaps, quote:
His Majesty's Government … believe that … the Central People's Government should represent China in the United Nations. In view, however, of that Government's persistence in behaviour which is inconsistent

with the purposes and principles of the Charter, it appears to His Majesty's Government that consideration of this question should be postponed."—[OFFICIAL REPORT. 27th June, 1951; Vol. 489, c. 1371.]

Mr. Silverman: Will the right hon. Gentleman bear in mind that the latter part of that quotation was a long time ago and that a great many people now doubt very much whether it is reasonable to expect the Government of a great nation to obey the rules of a club which it is not allowed to join? Will he bear in mind that the last sentence of my question is not the point about which I was asking him? The Question really asked him what steps, if any, he was proposing to take to secure that the de factoGovernment of China was brought into the United Nations machinery.

Mr. Eden: As regards the applicability of last year's quotation to the present time, I would only remark that the very condition which the previous Government found unacceptable for the support of China's membership at that time applies now: that is, the fact that she is actually breaking the rules of the club that she desires to join.

Sir D. Savory: Would not the representation of the Communist Government on the Security Council be vigorously opposed by the United States, who have never made the mistake that we made of recognising this Communist Government in China?

Oral Answers to Questions — GERMANY

Contractual Agreements (Signature)

Mr. S. Silverman: asked the Secretary of State for Foreign Affairs whether he is aware that the Government of the Federal German Republic has been advised that it had no legal power to sign in the Republic's name the recent Contractural Agreements at Bonn; when a final judicial determination of that question is expected; and if he will give an assurance that in the event of an adverse decision Her Majesty's Government will not hold itself bound by the agreement.

Mr. Eden: Before signature of the Agreements the German Federal Constitutional Court considered and refused an


application for an interim injunction to prevent the Federal Chancellor from signing them. The Federal President has now asked the Court for an advisory opinion on the question whether the ratification of the agreements would require amendment of the Constitution. It is not known when the Court's opinion on this matter will be given.
The validity of the Federal Government's signature of the agreements is not being contested before the Court. The last part of the Question does not, therefore, arise.

Mr. Silverman: Is it not true that the refusal of the interim injunction was on a purely procedural point and not on the merits of the argument? Is it not also true that the Federal German Government has since been advised by two prominent legal experts in its own country, whose opinion it sought, that it had no power under the constitution to sign the Agreements in the name of the Federal German Republic? In those circumstances, ought we not to be very careful indeed to see that we do not hold ourselves bound by an agreement by which the opposite party is not bound at all?

Mr. Eden: The position is a complicated one. It is a fact that the President has now asked the Court for certain findings as to whether or not he can sign the ratification, but that really is a matter for the Germans themselves under their constitutional law. As regards our international position, it is quite clear, because both these documents, as their texts show, are interdependent, and their coming into force depends upon their ratification by all the Powers who are signatory to them.

Mr. Bellenger: Is it not a well known fact that legal experts, not only in Germany, sometimes hold different opinions and do not always interpret the law as the courts do?

Mr. Eden: I have heard of that happening in one or two countries.

Berlin (Situation)

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs if he will make a statement on the recent incidents in Berlin affecting the relations between

the British, American and French authorities on the one hand and the Russian authorities on the other hand.

Mr. Eden: The major incidents which have occurred are the Soviet action to stop British and American patrols on the autobahn and the Soviet occupation of the road connecting the group of houses at Eiskeller with the British Sector, to which it belongs.
Letters have been exchange with General Chuikov about the autobahn patrols, and a reply is being prepared to his latest letter. Meanwhile, our patrols are being denied access to the autobahn.
We, for our part, have denied to the Russians and their German employees access to the Soviet-controlled radio building in the British Sector. Since the Russians have now freed the Eiskeller road, we have restored freedom of entry to the radio building, subject to the requirement that East German employees obtain passes for entry.

Mr. Henderson: In view of the fact that this unsatisfactory situation forms part of the wider German problem, would not the right hon. Gentleman agree that the sooner the proposed Four Power Conference takes place, the better? In that connection, can the right hon. Gentleman say when the Government propose to send a reply to the last Russian note?

Mr. Eden: That is entirely a different question. Our conversations, if they take place, are about free German elections. The Question deals with the situation in Berlin, which I think is not unsatisfactory, because it shows that as the result of our taking firm action we have received some satisfaction from the Soviet Government.

Mr. Henderson: I was not suggesting that Her Majesty's Government had acted unsatisfactorily. Surely, the right hon. Gentleman would agree that this pin-pricking on the part of the Russian authorities is extremely unsatisfactory.

Mr. Eden: It is unsatisfactory, but the right hon. and learned Gentleman would agree that I can have no responsibility for the pin-pricks that are inflicted. Our duty is to maintain our rights and responsibilities firmly in the face of the pin-pricks. This we have done in this instance, with, I think, quite satisfactory results, and I am sure that it is the right process to be


firm and unprovocative in all these matters.

Mr. J. Amery: What is the position about the Russian war memorial in the Western Sector, where, I understand, Russian sentries kidnapped a West German person a fortnight or so ago?

Mr. Eden: If my hon. Friend would be good enough to put that question down, I will give him an answer.

Mr. Henderson: The right hon. Gentleman has not answered the last part of my supplementary question: when do the Government propose to send a reply to the last Russian note?

Mr. Eden: That is an entirely different question to the one on the Paper. It is a very important question, and I should be obliged if the right hon. and learned Gentleman would put it on the Paper. I should hope that the answer would be delivered quite soon, but I should like to have notice of that.

Oral Answers to Questions — KOREA

Koje Camp Disturbances

Mr. Hamilton: asked the Secretary of State for Foreign Affairs if he will inquire of the United Nations Command in Korea how many United Nations personnel have lost their lives in the recent disturbances on Koje island.

Mr. Nutting: During the regrouping of prisoners now being carried out by Brigadier-General Boatner, one American soldier was killed on 10th June.

Mr. Hamilton: Have any further lives been lost in the six or eight months since the disturbances began last year?

Mr. Nutting: I think I am right in saying that one further American life was lost last February.

Prisoners of War (Rescreening)

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether he can make a further statement on the proposals for rescreening prisoners of war in Korea.

Mr. Eden: The United Nations offer of a further screening, which I described in my statement of 7th May, still stands. We are in constant touch with the United States and other interested Governments in order to try to find a way out of the present deadlock.

Mr. Henderson: In view of the widespread concern over the original screening, would not the right hon. Gentleman recommend that a rescreening should take place without delay on the basis that all prisoners of war—the 70,000 in question—should be repatriated at the proper time, except those who express the desire not to be returned for fear of political persecution?

Mr. Eden: I think I dealt with that in answer to a supplementary question by the right hon. and learned Gentleman last week. The position is that so far any question of rescreening has been rejected by the Communist authorities. As I said last week, if the only question were between rescreening now and after the armistice, I would personally be ready to agree to the rescreening now, but it would have to be on the understanding that the result of that rescreening would be accepted. These are matters which we are discussing with the United States Government, and they are somewhat delicate at this stage. Therefore, I hope that the House will not press me further at this time.

Mr. Chetwynd: Can the right hon. Gentleman say what are the objections to immediate rescreening, because in the opinion of most people this would facilitate further progress with the truce talks?

Mr. Eden: The difficulty at present is to secure an assurance from the Communist authorities that they would agree to accept the results of that rescreening. It is of no value to do it unless we get that assurance. We might even get it, but I should rather not go further at the moment.

Mr. Sorensen: asked the Secretary of State for Foreign Affairs, in view of the possible acceptability of representatives of India and of Pakistan by the Chinese Government, if Her Majesty's Government will consider proposing to the United Nations that representatives of the Indian and Pakistan Governments should take part in the rescreening of prisoners of war in Koje Island by non-participants in Korean military operations.

Mr. Eden: As I am in communication with the United States Government on the question of screening and cognate questions, I should prefer not to make a further statement on this topic at present.

Mr. Sorensen: While recognising the delicacy of these negotiations, can we at least have an assurance that the right hon. Gentleman will bear in mind the value of the representatives of these two countries in view of their acceptability to China at the present time?

Mr. Eden: The hon. Member can be assured that I will bear this and a great many other questions in mind in these very difficult and delicate negotiations. I am not without hope that we may be able to make some progress.

U.N. Discussions

Mr. Dodds: asked the Prime Minister if he will call for an immediate conference of all United Nations taking part in the war in Korea to discuss the present position.

The Prime Minister (Mr. Winston Churchill): No, Sir. There is a constant exchange of views between the Governments whose forces are taking part in the United Nations action in Korea and formal conference does not seem necessary.

Mr. Dodds: Will the Prime Minister state how much longer we are to stand meekly on the side line while American chiefs could decide our fate? Is it not the case that mismanagement of the truce talks could result in this country being drawn into the third world war? Is it not obvious by now that this country and other countries should be represented at those talks?

The Prime Minister: All those arrangements were made by the late Government—and anyhow I do not think Question time is appropriate for discussing these matters.

Mr. Shinwell: In view of the fact that the Prime Minister will no doubt agree that the armistice talks have been unduly prolonged—whoever is to blame—and that it is obvious that the military commanders on the spot are quite incapable of coming to a satisfactory conclusion, would it not be wise to transfer the discussion to diplomatic channels and that a conference of the kind suggested might be well worth considering?

The Prime Minister: I have nothing to add to the answer I have given.

Mr. Dodds: Owing to the unsatisfactory nature of the statement that the Prime Minister has made, I beg to give notice that I shall raise the matter on the Adjournment.

Oral Answers to Questions — D.D.T. (WORLD SUPPLIES)

Mr. Sorensen: asked the Secretary of State for Foreign Affairs what report has been made by the Economic and Social Council of the United Nations in respect of world requirements, supply and distribution of D.D.T.; and to what extent a shortage still exists.

Mr. Nutting: The Economic and Social Council has not itself so far reported on this question. A working party set up to examine the position has, however, reported to the Council that no significant shortage of D.D.T. exists.

Mr. Sorensen: Is the hon. Gentleman aware that a report was promised some time ago when there was a shortage of D.D.T. in some parts of the world whilst there was a lot in other parts, and in those circumstances can he assure the House that D.D.T. is available now for all those places where it is urgently required?

Mr. Nutting: I am told that there are still certain difficulties, mainly of an administrative character, which arise out of the purchasing procedure by Governments, but apart from that no significant shortage exists, as has been reported by the Working Party

Mr. Noel-Baker: Does that mean that no shortage for the present users of this commodity exists, or does it mean that if it is used as it ought to be used in many other places and for many other purposes there would still be enough?

Mr. Nutting: It means that the manufacturing capacity is still considerably in excess of demand.

Oral Answers to Questions — O.E.E.C. (FUNCTIONS)

Mr. Albu: asked the Secretary of State for Foreign Affairs what functions it is proposed shall be carried out by the Organisation for European Economic Co-operation during the coming months.

Mr. Eden: On the basis of the decisions so far taken by the Council, the


main task of the Organisation for European Economic Co-operation in the coming months will be to review and report on the economic position of member countries and their prospects in the period following the end of the European recovery programme last April. The report, which will also cover the United States and Canada, is expected later this year.
Special attention is being paid to the expansion of production and to internal financial stability, on which a group of independent experts will shortly report. The organisation will also endeavour to maintain, and if possible extend, measures taken for the liberalisation of trade, and will complete the agreement to continue the European Payments Union.

Mr. Albu: Can the Foreign Secretary tell us in what way the United States and Canadian Governments will be associated in the future with the work of the Organisation?

Mr. Eden: This report, which I hope will be available in the course of this year, covers a considerable period. It will also deal with the United States and Canada, but how they will be associated with the discussions is a matter yet to be examined.

Oral Answers to Questions — ROUMANIA (DEPORTATIONS)

Mr. Teeling: asked the Secretary of State for Foreign Affairs whether he is aware of the recent mass deportations from towns in Roumania of nearly 500,000 people; that this is a violation of Article 3 of the Peace Treaty; and what steps he will take to ensure the fulfilment of the terms of the Treaty.

Mr. Nutting: The latest authoritative reports which my right hon. Friend has received do not indicate that mass deportations on the scale mentioned by my hon. Friend have taken place during recent months. There seems little doubt, however, that numbers of person continue to be deported from Roumanian towns, and the situation will continue to be carefully watched.
As regards the second part of the Question, my hon. Friend will be aware of the Resolution adopted by the General Assembly of the United Nations on 3rd November, 1950, on the observance in

Roumania, Bulgaria and Hungary of human rights and fundamental freedoms. Her Majesty's Government are collecting, in accordance with paragraph 5 of this Resolution, evidence of violations of the Human Rights clause of the Roumanian Peace Treaty and this evidence will shortly be presented to the Secretary-General of the United Nations.

Mr. Teeling: Does my hon. Friend realise the horror that is felt by people in this country who know the details, that they are very few because it no longer seems to be news in the Press here, and cannot he do something on the lines of refusing to have anything to do with the Roumanian legation in this country or to ask the shopkeepers and tradespeople to boycott the goods of that nation and to boycott members of the Legation?

Mr. Nutting: I would prefer not to comment upon my hon. Friend's suggestion. As regards giving the fullest publicity to these horrible acts by the Roumanian Government, I can assure him that when we present the evidence to the Secretary-General of the United Nations there will be the fullest publicity for them.

Oral Answers to Questions — MINISTRY OF FOOD

Meat Prices

Mrs. Mann: asked the Minister of Food the amount of price increase as it affects maximum and minimum classes of beef and mutton.

The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill): The price increases on the lower and higher qualities vary according to type and cut. I will, with permission, place in the Library of the House a list of the old and new retail prices for beef and mutton showing the increase per lb. for each cut.

Mrs. Mann: While thanking the hon. Gentleman for placing the increases in the Library, may I ask if he is aware that it is quite impossible for the housewife to go to the Library to find out if she is being correctly charged? Is he also aware that there is no butcher in Britain who places price tickets on the cuts of meat?

Dr. Hill: It will not be necessary for housewives to visit the Library, as it is


a requirement by law that the prices should be exhibited in every butcher's shop.

Mr. Beswick: Can the Minister arrange to do another broadcast about this?

Mr. Speaker: That does not strictly arise out of the Question.

Mrs. Mann: asked the Minister of Food what percentage of bone and fat is permitted in the weekly ration; and what price the purchaser must pay for same.

Dr. Hill: The proportion of fat and bone naturally varies not only between each carcase but also between individual cuts from the same carcase. The fat and bone content of any cut of meat is sold at the scheduled price for that cut.

Mrs. Mann: Can the Minister tell us where we can see the schedule prices for fat and bone, and is he aware that three-quarters of the ration is made up of fat and bone? Would he bring back the advice, "Don't blame your butcher; blame the Radio Doctor"?

Dr. Hill: The scheduled price for each cut, including such meat, bone and fat as Nature has implanted in the body, is exhibited in every shop.

Grocery Prices

Mrs. Mann: asked the Minister of Food whether, in view of price increases over a large amount of groceries, he will now re-impose control on each of them.

Dr. Hill: No, Sir. The prices of uncontrolled groceries have been affected by increased costs, particularly of wages, transport and packaging materials. Price control would not serve to eliminate such increases.

Mrs. Mann: Is the hon. Gentleman aware that the orders which he has piloted through this House recently have resulted in the release of controls in the great majority of cases, and since these increases now amount to 31 items and represent about 4s. per week, has he informed the Chancellor that the increase of unsubsidised items amounts to more than the increase of 1s. 6d. about which we have heard?

Dr. Hill: As the hon. Lady's initial statement at the beginning of her supplementary was inaccurate, the rest does not arise.

Mrs. Mann: Owing to the unsatisfactory nature of the whole set-up of the Food Ministry, I shall raise this matter on the Adjournment and in every other place I can think of.

Tea

Mr. Lewis: asked the Minister of Food the amount of supplementary permits issued for tea in the last three periods prior to the withdrawal of the subsidy.

Dr. Hill: As the reply contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. Lewis: Is the Minister aware that it has been reported that a number of retailers are stocking up with tea at the subsidised price ready to sell at the unsubsidised price, and making 4d. a lb. profit at the State's expense? Will he put a stop to that and see that it does not occur when he removes the subsidies from other foods—which, incidentally, I hope he will not do?

Dr. Hill: Care has been taken to prevent what the hon. Gentleman has stated to have occurred. The supply of tea going into the shops prior to the increase in price was exactly the same as at normal times. There is no excuse for citizens being unable to obtain their tea ration.

Mr. Lewis: That reply is contradictory to the Minister's former reply. If there are, as he states, a number of facts and figures for supplementary permits, they mean that he has issued supplementary permits, and that means that additional supplies of tea are going in. Will he see that that is stopped?

Dr. Hill: The supplementary permit is a part of the normal distribution machinery, which has not been departed from in recent weeks.

Following is the reply:

Supplementary permits are issued locally, and the only figures available centrally relate to amounts of tea later purchased under such permits. From 23rd March to 19th April, returns of these purchases totalled 724,000 lb.; from 20th April to 17th May, 1,615,000 lb., and from 18th May to 14th June. 1,231,000 lb.

Sugar (Jam Making)

Mr. G. Williams: asked the Minister of Food if he will give an advanced allocation of the sugar ration for the next six months now, so that housewives may, if they so wish, use it for jam making, in view of the large crop of soft fruits.

Dr. Hill: My right hon. and gallant Friend sympathises with the object my hon. Friend has in view, but this is not a practicable arrangement.

Mr. Williams: Could not the Minister decrease it by even 2 oz. a week? Everybody will not take it up, but if he does not do so is he aware of the inevitable hardship to horticulturists who are unable to sell their crops?

Dr. Hill: My hon. Friend will appreciate that the individual can change his retailer every eight weeks, and it would follow that it would be an extremly difficult administrative arrangement to secure that no one obtained more than his appropriate ration.

Mr. Poole: Is not the Minister aware that he and many of his hon. and right hon. Friends were fond of telling us a few months ago that there was plenty of sugar in the world? Why does he not get some of it?

Dr. Hill: There is plenty of sugar in the world, but we cannot afford to buy it.

Jam (Fruit Standard)

Captain Duncan: asked the Minister of Food whether he will now implement the recent recommendations of the Food Standards Committee regarding the minimum fruit content of certain jams and marmalade.

Dr. Hill: My right hon. and gallant Friend has decided to make no change this year, but to review the whole matter before the next jam-making season.

Captain Duncan: Is my hon. Friend aware that that decision will be very disappointing to growers of soft fruit in this country this year, when they expect a bumper crop? Is he aware, for instance, that Hampshire strawberries are being sold at Covent Garden today at 1s. 6d. per lb., well below the cost of production, and that there are grave fears that growers of other kinds of soft fruit will be in serious financial difficulty?

Dr. Hill: My hon. and gallant Friend will realise that in their recommendations the Committee suggested the lowering of standards in some cases as well as the raising of standards in others, and no change, apart from rounding up, in the case of strawberries. My right hon. and gallant Friend was led to the decision not to accept the recommended standard in raspberries, for example, because it would have meant an increase in the price of jam of approximately 1½d. per lb. In the view of my right hon. and gallant Friend there is a danger that such a rise would result in a level of purchases so much reduced as to involve a lesser use of fruit than in former years.

Oral Answers to Questions — CHANCELLOR OF THE DUCHY OF LANCASTER (DUTIES)

Mr. Nally: asked the Prime Minister if he will make a full statement as to the scope of authority and nature of direct responsibility to be assumed by the Chancellor of the Duchy of Lancaster in his new duties of ensuring the accurate and convenient presentation of information to the public about Departmental activities.

The Prime Minister: I would refer the hon. Member to the answer I gave to the right hon. Gentleman the Member for Battersea, North (Mr. Jay) on 12th May.

Mr. Nally: While being fully aware of the nature of that answer, may I ask whether the Prime Minister would care to tell us whether the first results of this appointment were the chaos and confusion that arose in public relations on Monday, in relation to the changes in transport fares?
Secondly, in view of the various different definitions of function that have been given by his over-lords, would it not be an act of grace and courtesy to the House if the Prime Minister would tell us precisely what this over-lord and his very able assistant are intended to do—and tell us in detail and not in the vague phrases of which the Prime Minister is a master?

The Prime Minister: I have nothing to add to my answer.

Mr. Nally: asked the Prime Minister the purpose of appointment and the precise status in relation to other Government officers, fulfilling comparable functions, of the newly appointed Public Relations Adviser to the Chancellor of the Duchy of Lancaster.

The Prime Minister: In order to assist him in his work, my noble Friend the Chancellor of the Duchy of Lancaster is attaching to his personal staff an officer who will act as Press officer and as his liaison officer with the heads of information or public relations divisions of Government departments.

Mr. Nally: While having every confidence in the very high abilities of the gentleman who has been appointed as Press officer, may I ask if the Prime Minister is aware that this Press officer himself is still not quite clear—and neither is the House—what job he has to do, and what his relationship is to other Departments? Will the Prime Minister tell us—or does he himself not know?

The Prime Minister: I have nothing to add to my answer.

Mr. Shinwell: Will the Prime Minister tell the House why he has suddenly become so shy? Usually he is very anxious to add a great deal on supplementary questions. Could he not expand a little on this occasion? What is the matter with him?

The Prime Minister: I have to measure the length of the response to any supplementary question by the worth, meaning and significance of that supplementary question.

Mr. H. Morrison: Will not the Prime Minister be a little more forthcoming? He has refused to tell us the specific duties of the Chancellor of the Duchy in respect of Government publicity. It is now clear that they have appointed a public relations adviser to advise the Chancellor on duties the details of which we do not know. Now the Prime Minister fails to tell us the duties of the public relations officer. Both these gentlemen are paid out of public funds. Why should the Prime Minister treat the House of Commons with contempt?

The Prime Minister: I never treat the House of Commons with contempt. I was

endeavouring to accelerate the course of its business and several hon. Members have done me the honour of putting Questions to me today which I shall not be able to answer.

Mr. Nally: On a point of order, Mr. Speaker. In view of the unsatisfactory and impertinent nature of the reply——

Mr. Speaker: Order. That is a very improper observation——

Hon. Members: Withdraw.

Mr. Lewis: Further to that point of order——

Mr. Nally: Am I to understand, Mr. Speaker, in view of the answer to my supplementary question, that you are seriously suggesting that I should withdraw the word "impertinent"?

Mr. Speaker: I have frequently ruled, as my predecessor has too, that in giving this form of notice, which the hon. Member was about to do, the proper form of words is, "Owing to the unsatisfactory nature of the reply." It is really out of order to load that notice with words of that character.

Hon. Members: Withdraw.

The Prime Minister: On a point of order, Mr. Speaker. Is not this abuse of the phrase "On a point of order" becoming a scandal in this House?

Mr. Nally: rose——

Mr. Speaker: Do I understand the hon. Member to give notice that he intends to raise this on the Adjournment?

Mr. Nally: Exactly.

Mr. Speaker: Then I call Mr. Wyatt.

Oral Answers to Questions — PUBLIC SERVANTS (RETIREMENT AGE)

Mr. Wyatt: asked the Prime Ministerm whether, in view of the continual increase in longevity stimulated by the discoveries of medical science, he will recommend the setting up of a Royal Commission to review the age limits for retirement throughout the public service and for all those holding positions to which they have been officially appointed, and to make recommendations.

The Prime Minister: No, Sir. The House will be aware that the Minister of Labour and National Service has recently set up a National Advisory Committee on the Employment of Older Men and Women, which is considering among other things retirement policy and practices in all fields of employment, including the public service.

Mr. Wyatt: Is not the right hon. Gentleman aware that there is grave public disquiet that his right hon. Friend the Minister of Housing and Local Government should have given Lord Beveridge a year's notice to quit on the ground that he is 73 years of age, when there are older persons who are occupying even more responsible positions? Is it not time that the question of the relation between the age of a person and his capacity to do his job should be reviewed in the light of the discoveries of medical science?

The Prime Minister: This Question, although it may be prompted by the hon. Member's own ambitions, is nevertheless one which has always been decided hitherto in accordance with the opinions of a majority of the House of Commons.

BUSINESS OF THE HOUSE

Mr. Attlee: May I ask the Leader of the House if he has any statement to make with regard to business?

The Lord Privy Seal (Mr. Harry Crookshank): It is not now proposed to take the Motion to approve the B.B.C. Licence and Agreement this week, and it may be for the convenience of the House to know that the Motion will be moved at 7 o'clock on Monday next. This arrangement has been made after discussion through the usual channels.
The business to be taken in the early part of Monday's Sitting will be announced with the rest of next week's business tomorrow in the usual business statement.

CENTRAL AFRICAN FEDERATION (DRAFT SCHEME)

The Secretary of State for the Colonies (Mr. Oliver Lyttelton): The House will recall that in the course of a debate on 4th March it was explained that Her Majesty's Government were increasingly conscious of the need to prepare and place before the public as early as possible a definite draft scheme for the federation of Southern Rhodesia, Northern Rhodesia and Nyasaland. The absence of a detailed picture was responsible for many of the anxieties and suspicions that have found expression in some quarters, both in this country and in the three territories, about such a federation.
Her Majesty's Government had therefore decided that the Conference which adjourned at Victoria Falls last September should be invited to re-assemble in London in April, and that its principal task should be the drawing up of a draft constitutional scheme which would take account of the recommendations made in the officials' report in 1951 (Cmd. 8233) and of any modification therein which the Central African Governments might wish to propose.
The Conference duly met on 23rd April at Lancaster House and remained in session until 5th May. My colleague the Secretary of State for Commonwealth Relations and I led the United Kingdom delegation. The Southern Rhodesian delegation included the Prime Minister and other Ministers as well as members of the Opposition Parties and two Africans. The Northern Rhodesian delegation consisted of the Governor and official and unofficial members of the Legislative Council. The Nyasaland delegation included the Governor, senior officials and leading unofficials.
It was a matter of great regret to the Conference and to Her Majesty's Government in the United Kingdom that African representatives of the African Representative Council of Northern Rhodesia and the African Protectorate Council of Nyasaland who had come to London declined an invitation to participate in the Conference or even to attend as observers. The Conference faced the many difficult issues involved with determination and good will, and a draft federal scheme was agreed upon which


is being published today as a White Paper and is now available in the Vote Office.
The Conference also decided to set up three Commissions which during the summer would investigate the financial, administrative and judicial problems attending the establishment of a federation in Central Africa. It is the intention of Her Majesty's Government that, after these Commissions have reported, a further Conference shall be held in Africa later in the year to give final shape to the federal scheme. Her Majesty's Government and the Central African Governments would then decide whether, subject to ratification in the three territories, the scheme in its final shape shall be approved.
It is our earnest hope that meanwhile the public here and in Central Africa, and in particular the leaders of African opinion, will study very carefully the details of the Draft Federal Scheme now published, before they reach conclusions about it. For a summary of the Scheme, I would refer the House to the Preface to the White Paper. I wish to draw special attention to certain features in it.
Why at the outset do we aim at a federal form of government? Members will find on page 3 of the White Paper a statement of the reasons why Her Majesty's Government have rejected the alternative of amalgamation. We believe nevertheless that the closer political association of the three territories is urgently needed in the interests of all their inhabitants. A federal scheme will satisfy that need while at the same time reserving to the separate territorial Governments, which would retain their existing relationship to Her Majesty's Government, the handling of those matters affecting most closely the day-to-day life of the African. That is a fundamental feature of the scheme which should appeal to African opinion.
In order to ensure that a close and effective watch is kept on African interests in the federal sphere, we propose to set up a special instrument, the African Affairs Board. We could not accept the original recommendation of the officials' conference that the Chairman of the Board, appointed by the Governor-General with the approval of the Secretary of State, should have a seat in the Cabinet. This seemed to us constitutionally unsound.
But we give the Board statutory right of direct access to the Prime Minister and the Executive Council; we introduce qualifications for membership which will make the Board independent of the Legislatures and the Executive of both the Federation and the Territories; and we empower it not only to make representations in the interests of Africans on any matter within the competence of the Federation but also to ensure that any legislation which it regards as differentiating, in terms G in its application, between Europeans and Africans to the disadvantage of the latter shall be referred to Her Majesty's Government. The vital importance of this provision is unquestionable. We believe that the present proposal is both constitutionally more satisfactory and will prove more effective in protecting the interests of Africans.
Moreover, in the preparation of the draft scheme we have carried out our promise that certain rights of which the African is particularly jealous should be formally embodied in the Constitution. Land and land settlement questions are reserved to the territorial Governments; the Federal Government has no power to acquire land except for the necessary discharge of its proper functions, for example, for the extension of a railway line, and always in accordance with existing Orders in Council and relevant legislation. The continuance of the protectorate status of the two northern territories and the continued responsibility of the Territorial Governments for local and territorial political advancement are emphasised.
Lastly, very important provisions have been included in regard to future constitutional changes. All amendments of the Constitution will require to be passed by a two-thirds majority of the membership of the Federal Assembly and will be reserved for Her Majesty's pleasure. More than that, if objection is raised to any proposed amendment either by the African Affairs Board or by a Territorial Legislature, then the amendment can only be made by Order in Council, and the draft Order will be laid before Parliament here for 40 days before it is made.
The federal proposals published today take full and fair account of the interests of all the inhabitants of Southern Rhodesia, Northern Rhodesia and Nyasaland. They offer the framework of a


new political organism which we believe will satisfy the needs of Central Africa and promote the welfare of the three territories and all their inhabitants. We earnestly hope that the Draft Federal Scheme will be very carefully studied, both here and in Central Africa, and that as a result of the discussions upon it the constitution of a federation on the basis proposed will eventually be approved.

Mr. J. Griffiths: The Secretary of State has made a long and important statement, and we shall desire to study it and the White Paper, and in due course it will be essential for us to have ample time to debate the subject. In the meantime, I should like to ask three questions further to elucidate the changes which are being made from the officials' report.
I gather that the Conference has rejected the proposal in the officials' report that a Minister for African interests should be appointed, not by the Federal Prime Minister, but by the Governor-General after consultation with Her Majesty's Government and the Secretary of State, that Minister also only to be dismissed after consultation with Her Majesty's Government.
Does this not only depart from the proposals in the officials' report but also establish a precedent in the whole of our relationships with all the Colonies for which we are responsible? In all the Colonial Legislatures which I know, there is on the Executive Council, the equivalent of the Cabinet, either a member of the indigenous people or a representative of those people. Do I gather that there will now not be a single member of the Cabinet of the Federal Government directly responsible for the safeguarding of African interests?
Under the former proposals the Minister was to be the Chairman of the African Affairs Board with direct access to the Governor-General and, through the Governor-General, to Her Majesty's Government. Do I gather that the Chairman of the Board will not have direct access to either the Governor-General or Her Majesty's Government? Does not that also mean a fundamental departure from the scheme earlier proposed? Will the scheme provide that it is obligatory on the Government to submit all intended legislation to the African Affairs Board before it is submitted to the Federal

Legislature, with power to hold it up until it has been considered by Her Majesty's Government?
On the subject of procedure, I gathered that the Secretary of State said that it is proposed to hold a further Conference. What steps are being taken in the meantime to consult African opinion and other opinion in Central Africa and to report views to this House? Have we not a special duty to consult African opinion because of our responsibilities as the protecting nation? Do the Secretary of State for the Colonies and the Secretary of State for Commonwealth Relations propose to adopt the method my right hon. Friend the Member for Smethwick (Mr. Gordon Walker) and I adopted and to visit Central Africa during the intervening months and fully consult all opinion, including African opinion?

Mr. Lyttelton: I will try to answer the right hon. Gentleman's questions seriatim. It is true that the Conference has rejected the idea of an unelected Minister as a member of the Cabinet without responsibility to his colleagues. We considered that to be constitutionally unsound. That has no relation to the matter of African interests in other Colonial Legislatures.
The Chairman of the African Affairs Board and, consequently, the Board have direct access by Statute to the Prime Minister and the right and the power to certify, if that is the correct term, that any legislation is discriminatory, in which case, through the Governor-General, it has to come home to the Secretary of State for the signification of Her Majesty's pleasure.

Mr, Griffiths: Has the Chairman of the African Affairs Board himself direct access to the Governor-General and to Her Majesty's Government, or is he subordinate to the Prime Minister?

Mr. Lyttelton: If the African Affairs Board considers that any legislation is discriminatory against Africans, it sets in operation machinery which will prevent that legislation from becoming law until it has been referred to Her Majesty's pleasure. Now that the scheme is definite, we shall take all the steps in our power to consult African opinion, and it is hoped to hold the next Conference in the last quarter of the year.

Mr. Griffiths: The Secretary of State has not answered the last of my questions. I asked whether he and the


Secretary of State for Commonwealth Relations propose themselves to consult opinion in Central Africa, including African opinion.

Mr. Lyttelton: We propose that some Minister, the Minister of State or myself, shall go out before the Conference to consult African opinion.

Mr. Gordon Walker: Can the right hon. Gentleman be rather more precise about when the second Conference is likely to be held, because there may be a question of whether or not this House will be in session? Also, can he at this stage say whether legislation in this House will be necessary before the scheme is carried through, so that we shall have equivalent rights of ratification, so to speak, with the territorial Legislatures?

Mr. Lyttelton: I cannot be precise in my answer to the right hon. Gentleman's first question, but it is hoped to hold the Conference in the last quarter of this year and probably in October, and that is as far as I. can go. In reply to the second question, as far as I can see, legislation in this House will be necessary.

Sir D. Savory: Is my right hon. Friend aware how very much the proposal for a two-thirds majority for constitutional changes will be approved on this side of the House?

Mr. Fenner Brockway: Only on that side.

Sir D. Savory: If only we had had such a provision in the House of Commons, university representation would never have been abolished.

Mr. Fenner Brockway: The right hon. Gentleman said nothing about African representation in the Federal Assembly; can he confirm that in an Assembly of 35 there are to be only six Africans, of which only four are to be elected? Does not his proposal mean that there can be no change in that insignificant representation except with the consent of one of the territorial Governments, which include the Government of Southern Rhodesia?

Mr. Lyttelton: No, Sir; those statements are not correct. I think I had better not go into the details of the

White Paper which, on the matter of representation, will, I think, give the hon. Member some comfort. They are wider than those provided by the officials' report. [An HON. MEMBER: "What are they?"] The hon. Member will realise that I am in some difficulty—hon. Members have not yet got the White Paper—and it would not be appropriate to go into details on the entire 37 pages of the White Paper. In reply to the other point, of course there is nothing to prevent some of the elected members from being Africans as well.

Sir Herbert Williams: Would it be in order to move that this debate, which has no basis, be no longer continued?

Mr. Speaker: There is no Question before the House and, therefore, no debate. I think the general sense of the House is that, as the White Paper is available, we might postpone discussion of the matter until hon. Members have had a chance of seeing it.

Mrs. Eirene White: There are one or two points in the statement of the right hon. Gentleman——

Mr. Speaker: I think it is the general sense of the House that we should await the White Paper.

BALLOT FOR NOTICES OF MOTIONS

LICENSING LAWS (TOURIST TRADE)

Mr. McAdden: I beg to give notice that on Friday, 4th July, I shall call attention to the present licensing laws, with respect to international travel and the tourist trade, and move a Resolution.

FURTHER EDUCATION (PRIORITIES)

Mr. Hollis: I beg to give notice that on Friday, 4th July, I shall call attention to the importance of priorities in further education, and move a Resolution.

LOCAL GOVERNMENT REFORM

Mr. Ian Harvey: I beg to give notice that on Friday, 4th July, I shall call attention to the necessity for initiating measures of local government reform, and move a Resolution.

Orders of the Day — FINANCE BILL

As amended (in Committee and on re-committal) further considered.

New Clause.—(AMENDMENT OF S. 33 OF FINANCE ACT, 1947.)

Section thirty-three of the Finance Act, 1947, shall have effect in relation to the profits lax for any chargeable accounting period ending after the year nineteen hundred and fifty-one with the substitution in subsection (1) thereof for the reference to two thousand pounds of a reference to three thousand pounds, and in subsections (2) and (3) thereof with the substitution for the references to two thousand and to twelve thousand pounds respectively of references to three thousand and twenty thousand pounds.—[Mr. Albu.]

Brought up, and read the First time.

3.55 p.m.

Mr. Austen Albu: I beg to move, "That the Clause be read a Second time."
This proposed Clause is an alternative version of a Clause which was moved by my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) on the Committee stage of the Bill. Unfortunately, he moved the Clause at 4 o'clock in the morning, at the end of our debate, and I do not think anyone would consider that at that time the arguments put forward received very adequate consideration. There is no doubt that we had reached a time when we were all fairly exhausted and thankful to be rid of that stage of the Bill. Luckily, owing to the way things have happened, I have the opportunity of moving the Second reading of this Clause in the House at a rather more convenient time, 4 o'clock in the afternoon.
The object of the Clause is simple. It is to raise the exemption from Profits Tax from its present figure of £2,000 to a figure of £3,000 with a marginal relief up to £20,000. We have now reduced the figure moved on the Committee stage from £5,000, which is the figure to which relief is given for the purposes of Excess Profits Levy.
This proposal is one of a number of suggestions put forward during the Committee stage by my hon. Friends and myself particularly to assist small and very small companies. I see that the Parliamentary Secretary to the Ministry of Civil Aviation is prepared to reply on

this matter. In a rather brief reply on the former occasion—no doubt he also was exhausted from his efforts—he gave two main reasons why the Government should not accept the Clause.
The first was the cost to the Exchequer which, as he pointed out, if the Clause had been accepted in its original form, would have been £4 million. If the cost to the Exchequer when the relief to be given was on a figure which was to be raised to £5,000 was £4 million, I presume that now that we propose only to raise the figure to £3,000 the cost will be very much less. I have no idea whether it is possible to work that out, but no doubt we shall hear from the hon. Gentleman. I believe that the cost to the Exchequer, like other arguments which are to be introduced, is not a very salient argument.
The second argument was a debating argument that last year my right hon. Friend did not grant this concession, although Amendments were put down to the same effect. The situation this year is different in at least two respects. The first respect, which is particularly relevant when considering small companies, is that the imposition of the Excess Profits Levy, which, with its effect on the marginal rate of tax, is of the order of something like 80 per cent. to 85½ per cent. according to the extent to which profits are distributed, will be disastrous to many small and rapidly expanding companies.
We are all getting fairly used—it is nothing particularly new—to hearing the voices of chairmen of banks and company chairmen, particularly the chairmen of big companies, raised from time to time in protest against the present high level of company taxation. Of course, we can all hold different views on whether or not the companies they represent are or are not able to obtain the capital they need to maintain themselves and expand as the economy requires.
There can be very little disagreement, although I may have some argument with the hon. Member for Kidderminster (Mr. Nabarro) in a moment, that small companies, and very small companies in particular, have great difficulty in obtaining adequate finance to get themselves over their initial establishment period. Finance will always be available for the large, established, public company.
Whether or not, if it adopts a reasonably conservative dividend policy, it is able to build up sufficient reserves for maintenance and expansion I do not know, but I am certain that the large public company can always obtain additional finance up to the limit of what it is possible to do in the present situation when investment in new plant and equipment are restricted by the Government.
It is true that these large companies may not always obtain the finance on the conditions their directors would particularly like, but that is not the point we are discussing. The point is that they can obtain the finance if they want it. For the medium-sized company there are also means—the industrial and Commercial Finance Corporation, and many other finance corporations, which provide money for the established company. But, for the very small company getting over its first period of growth—for example, the company employing perhaps up to 50 employees in a manufacturing industry—the situation is extremely difficult. It is not worth while for any of the established financial bodies to provide the capital. I understand that it hardly pays them even to make investigations for the small sums which these companies want.
4.0 p.m.
When, on the Committee stage, my hon. Friends and myself introduced an Amendment to restore to some extent the initial allowances for small companies, I had rather an argument with the hon. Member for Kidderminster. He said that he thought there was no difficulty about these small companies obtaining money in one way and another. Since then he and I have had some correspondence which I think confirms what I said at the time, that these small companies find great difficulty in getting the money they require to tide them over this initial period.

Mr. Gerald Nabarro: I did not say that there was absolutely no difficulty, I said that there were opportunities for small companies to raise the necessary finance. Secondly, in fairness, and in view of the considerable publicity that was given to my view in the national and provincial Press, I should say that I have received only two letters from the country as a whole, both of which I

have, as a matter of courtesy, shown to the hon. Member for Edmonton (Mr. Albu). That does not represent a large body of opinion in support of his view.

Mr. Albu: I would state, purely as a matter of accuracy, that the hon. Member showed me only one letter. I have had other representations, and there is no doubt—I do not think that it is a serious matter of dispute—that small companies of this sort do have difficulties.
I hold the view that profits perform quite a different function in these small, and particularly the small owner-managed companies, from that which they perform in the large public companies the shares of which are freely transferable. They not only provide a much more direct incentive to efficiency and effort, but they are, for the reasons which I have already stated, almost essential for retention in the business, if the companies are to expand. I do not believe that that applies to companies which are able to obtain finance in the capital market in one way or another, but I am certain that for these companies it is a very important consideration indeed.
I believe that we need a continuing rate of new births of companies in order that they can grow up and tread on the heels of existing, established companies, and keep them on the alert. Also, because no one knows what is the most efficient size of business in any particular industry, it is very necessary to have a stream of companies growing up from small beginnings through medium size to bigger concerns, and so on, in order that in any particular trade or industry a company can reach the most efficient size.
It is obvious that that state of affairs cannot be attained unless there are continual new births of companies which are able to get over their infantile period. The sort of concession which we are seeking for these companies in this period, when they are being so penalised by this extraordinary tax, the Excess Profits Levy, is exactly the sort of concession which would help them most.
The other argument for doing at this moment what we ask, quite apart from the Excess Profits Levy, is the necessity to encourage a diversification of industry in areas such as Lancashire, where there is a serious trade recession, and where, it


is now agreed by most people, it will be necessary to introduce new industries. That is necessary not only for the sake of Lancashire itself, where there will have to be a very considerable diversification over the next 20 or 25 years, but also because in a period of re-armament a fairly large increase of sub-contracting engineering firms and firms of that sort is needed, to which this sort of concession would be of great help.
The concession sought by the new Clause is a small one; one could almost say it is more a matter of good will than of actual cash. Nevertheless, such a concession would be of some value and would certainly give some substance to the protestations of support for small industrial concerns and for a property-owning democracy which we hear from time to time from hon. Members opposite. I believe that the concession would be of great potential value, and I hope that on this occasion the Parliamentary Secretary will agree to accept it.

Mr. A. Woodburn: I beg to second the Motion.
I have a great deal of sympathy with the views just expressed by my hon. Friend the Member for Edmonton (Mr. Albu). It would be rather tragic if this continuing rebirth of companies and small industries were in any way prevented. We have had considerable experience of this matter in connection with the industrial estates.
The policy of those estates in England, I take it, as well as in Scotland is to provide buildings of different sizes and to give encouragement to a small company, or perhaps a person who has ideas, to start a concern in a very small way. If it develops, that company or person is automatically given the let of a bigger factory and so is enabled to move from factory to factory and is given the opportunity to build up quite a new and efficient industry.
I have seen some examples of industries that have been brought from abroad by refugees, such as, for example, the polishing and cutting of marble. That has been developed in such circumstances and has become quite a successful venture in this country. On the subject of the diversification of industry, I agree

with what my hon. Friend has said. It is particularly important, in cases such as the Development Areas in the West of Scotland and elsewhere, that there should be more diversity of industry. It is not enough to depend in those Development Areas on the possibility of bringing in big firms from elsewhere. The great danger of that process is that if a branch of such a firm is placed in a Development Area, it is withdrawn whenever there is any possibility of a recession, and the Development Area has to suffer.
If we can stimulate a variety of industries to take root in those areas, that danger is eliminated. I believe that the Treasury have always taken the view that they should not stifle these industries by being over-strict in the imposition of taxation. It would be very interesting if, in his reply, the Parliamentary Secretary could give us some idea of the policy of the Treasury in relation to stimulating such development.
I have a particular interest in hoping that one of these days we shall have some new industries developing in the Highlands. It is almost impossible to bring into the Highlands of Scotland industries from other parts of the country. The industries that can develop there must be indigenous in the sense of being connected with the products of the Highlands—woodwork, carpets or other products derived from wool, or even projects for the provision of tourist requirements. That can only happen if the people concerned feel that once they begin they are not going to be pushed over before they are properly on their feet.
I hope that in his reply the hon. Gentleman will give some encouragement to those people who have initiative and enterprise, and who are willing to make a start with some kind of industry, to develop their ideas, and that he will support the industrial estates, which are already giving support by means of Government money. If this Clause can do anything to help in that respect, I hope that the Treasury and the hon. Gentleman will give it sympathetic consideration.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. R. Maudling): This Clause is, as the hon. Member for Edmonton (Mr. Albu) has pointed out, very similar indeed to a Clause which was moved during the Committee stage by his hon. Friend the


Member for Gloucestershire, South (Mr. Crosland), who I am sorry to note is not with us today. I replied to the debate on that occasion, and I hope that the hon. Member will not take it amiss if the reply which I give today is very similar to that which I then gave. As he well knows, this is an exceedingly consistent Government, and does not vary its views from week to week on these matters of policy.
There is one point, and only one, on which the Clause differs from the one which was moved on that earlier occasion, namely, that the figure is not increased from £2,000 to £5,000 but from £2,000 to £3,000. The difference to the cost of the concession is much less than the hon. Member thought. I am advised that instead of costing £4 million, as it would have done in its original form, it would now cost about £3½ million in a full year. But that, I am afraid, means that the cost is still a very substantial item. The fact that this new Clause does not repeat the £5,000 figure from the E.P.L. provisions disposes of the argument, of which use was made in Committee, that we should have exactly the same figure in both parts of the Bill, so that argument need not be answered again.
I listened with interest to see what further arguments would be advanced by the hon. Member for Edmonton, in view of what transpired at the previous stage. The main argument used earlier was that the fall in the value of money meant that a figure of £2,000 which was reasonable in 1937, when the Profits Tax was first introduced, was unreasonable nowadays. At that time I was able to point out that this argument had been very powerfully destroyed in 1949 and 1951 by the hon. Member for Brighouse and Spenborough (Mr. J. Edwards), so I am glad that that argument did not appear again today.
We had instead two new arguments—well, one not entirely new. The first one was, of course, the absence of capital and the need of the small company to raise capital, to which reference was made earlier by the right hon. Member for Battersea, North (Mr. Jay), who referred to the dear money policy pursued by my right hon. Friend. Today the hon. Gentleman has added the point about the additional burden on the small company of the Excess Profits Levy. But,

of course, the small company is being exempted from the Excess Profits Levy up to £5,000, which is quite a substantial figure—substantially more than £2,000.
As for the question of the dear money policy, it is true that it is often argued—and there is, no doubt, a great deal of evidence to support it—that in many cases a tight credit situation bears more heavily on a small company than on a large company, but I am certain one can go much too far in pushing that argument. It is not true to say that the bigger the company the easier it is to raise money. That just is not so. The ability of a company to raise money depends upon its credit-worthiness, and its credit-worthiness is not a function of its size. I suggest that that argument can certainly be pushed altogether too far.
The other new argument introduced today was an exceedingly interesting one, mentioned by the hon. Member for Edmonton and developed in the interesting speech of the right hon. Member for East Stirling (Mr. Woodburn): that in order to enhance the diversification of industry it is important to encourage small businesses. That is perfectly true, and it has been true for a number of years. It was true in 1949. It was true in 1951, when a similar concession to this was turned down by the previous Government. It is not a new development. If that argument is true today, it was true then.
The point is not whether it is a good thing to help small companies. The question before the House is whether this is the right way to give additional assistance to small companies at this moment. At the end of the previous debate the right hon. Member for Battersea, North asked me whether I considered that this £2,000 limit should remain fixed for ever. I would certainly not say that for one moment. All I am saying is that, in the opinion of the Government, this is not the time to increase it.
In the debate of 1951 the then Economic Secretary said that it was not the right time to raise the concession to small companies when the tax itself was being increased. I should say, as I said on the previous occasion, that that is the time to give the small company greater concessions. The heavier the weight of tax the greater the need to give concessions or special help where special help is needed. But this year the Profits Tax


is not being increased. It has been decreased. The Profits Tax itself, both the undistributed and distributed rate, has been reduced this year.
Also, concessions have been made to director-controlled companies. The hon. Member for Edmonton seems to regard the joint stock company as a form of economic vice which it is his crusade in life to destroy. I thought it was the director-controlled company and the small, as it were, family business which he was particularly concerned to assist, and it is the director-controlled company that has been given further assistance in this Finance Bill.
In those circumstances, therefore, repeating, I am afraid, very much the arguments I used before, because they seem to me as valid today as they were then, because this concession would cost another £3½ million in a full year, and because already this year valuable concessions have been made in the Profits Tax, and particularly to small director-controlled companies, my right hon. Friend is not prepared to accept this new Clause.

4.15 p.m.

Mr. Roy Jenkins: The Parliamentary Secretary began and ended by apologising to the House for addressing a rather similar argument to that which he made in reply on the Committee stage. I do not think we would have minded that if we had felt that his reply in Committee was a good one, but we did not. I am afraid that we have the same doubts about his reply at this stage.
As I understood his argument, it was based mainly on the point that this was not the time to make such a concession. He referred to remarks which my hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) had made on previous Finance Bills, and seemed to think that the fact that those remarks had been made in the past let the Government out from doing anything at the present time, although not necessarily, he indicated, from doing anything in the future. I should have thought that my hon. Friend the Member for Edmonton (Mr. Albu), in his speech in moving the Second Reading of this new Clause, dealt in advance with that point.
This is a Finance Bill which makes certain substantial changes in the basis of company taxation, which introduces a whole new tax—the Excess Profits Levy—and which, as the hon. Gentleman was constantly pointing out, unlike previous Finance Bills with which my hon. Friend the Member for Brighouse and Spenborough was dealing, at the same time reduces the Profits Tax. The fact that there are these fairly sweeping changes, combined with the fact that we are to some extent moving into a new monetary era—an era of higher interest rates—seems to me to make this a time when this concession ought to be looked at afresh, and to make this a moment when, if a change was to be made, it would be a very good moment at which to make it.
I did not think the Parliamentary Secretary was at all convincing on the point he tried to make about a company's ability to raise money being independent of its size. He said it is a function not of its size but of its credit-worthiness. That was the phrase he used. I do not think that is the case. He did not apply his mind at all to the point my hon. Friend made earlier, that the fact that a number of small companies are eminently credit-worthy does not stand them in great stead, for the simple reason that, obviously, the facilities of public issue on the Stock Exchange are not at their disposal.
Nor is a normal finance house prepared, for good commercial reasons, to incur the costs of investigation. It just is not worth having a detailed investigation into a company which wishes to have £2,000, £3,000 or £5,000, even up to £10,000. It just is not worth it for the normal finance house. Therefore, these companies are up against great difficulty here, and I thought the Parliamentary Secretary brushed that argument aside altogether too hastily.
It cannot be said, taking the reduction in Profits Tax, not on its own but combined with E.P.L., that this is really a good Finance Bill for the small expanding company. It really is not on balance, taking the two together. It is no good just pointing to the changes in Profits Tax or the increases in directors' remuneration allowable and saying that that disposes of the needs of the small company.
The small company has a real problem at any time because of the difficulty of


raising new finance. It is more of a problem now, because the burden of E.P.L. is growing, and because of the new burden which dearer money imposes. I do not think it is good enough for the hon. Gentleman to say, "It was not done by the Labour Government in the past. Therefore, why should we do it now. At some time in the future we may look at it." This is the new money era. There is in this Finance Bill a new tax on expanding businesses. Therefore, this concession ought to be looked at and granted.

Mr. Douglas Jay: I was pleased, though surprised, to hear from the hon. Gentleman that the Government claim to have shown consistency in their conduct of this Finance Bill. They have, of course, been consistent in changing their mind and in giving way to proposals made from both sides of the House. As far as consistency is concerned, I should have thought that that would have been an argument for the Chancellor thinking again about this proposal.
I was sorry that the Parliamentary Secretary did not take this matter more seriously. It is a serious proposition. The hon. Gentleman's only argument was that he rejected this proposal this year because in earlier years the party which he represents advocated it and it was rejected by the then Government. That is not a strong argument. Whatever has happened in the past, we should examine the proposal on its merits this year. The hon. Gentleman attempted to belittle the argument that the small company has special difficulty in raising new capital.
I do not think that he was convincing. Surely he ignored one point completely. It is that naturally the new company tends to be a small company. That must often, though not always, be so, for fairly obvious reasons. It is clear that the new company, especially when it is a small company, is not in such a good position to raise capital resources as the old and established company which usually has reserves built up out of past profits. That is one reason why it seems to us that where a new company is small there is a special case for this proposal.
The hon. Gentleman challenged us to put forward additional arguments to those used during the Committee stage.

I will mention two. There are others. An important difference in the situation between this year and last year when my hon. Friend adduced arguments against a similar proposal—and this is the main reason why we felt unable to accept it, though candidly we were attracted by it last year—is the question of cost.
Last year was a Budget year in which, owing to the large increase in the defence programme, it being the first main Budget year of that programme, we were confronted with a heavy increase in general expenditure and an increase rather than a decrease in taxation. It was, therefore, an inappropriate year for making concessions of any kind.
But this year the situation is different. As the Chancellor pointed out in the Budget debate, he considered that the general situation of the country did not require a stiffer Budget and, by various manipulations which I will not discuss now, he was able to make large concessions in taxation. Some of those concessions we do not regard as justified. Our argument on this proposal is that it would have been better to make this concession to the small and new companies at a cost of between £3 million or £4 million, which is a small amount in comparison with the large reliefs made partially in taxation on high incomes.
I offer only one additional argument. This may be the last year in which the present Government have any opportunity to make such a concession as this. It is doubtful whether this Government will introduce another Budget. They may not have many months left. Since we have been discussing this Finance Bill, the stock of the Government has fallen lower and lower. At present the Government have hardly any friends even in the daily Press. One reads as many attacks on the Chancellor in the "Sunday Times" as one reads in the "Economist."
I doubt whether the Chancellor would like to have to go before the electorate at the next General Election, which cannot be very far away, in the position of defender of the large firm as against the small one. Therefore, I ask the hon. Gentleman, in order to avoid placing the Chancellor in the embarrassing position of going before the country as a protagonist of the large firm, to give serious


consideration to this proposal which we regard as thoroughly justified on its merits.

Sir William Darling: It is a little difficult for people like myself who have been associated with small businesses for many years to recognise our new allies opposite. The hon. Member for Edmonton (Mr. Albu) believes in making the best of every possible world, even of worlds of his own imagining. His influence, which ought to be considerable within his own party, apparently had no effective result when the previous Government had the opportunity of granting some concession to the small man.
In those days, if my memory serves me lightly, the idea was that the small man should be extinguished. Persons of my character—I am a type, after all; stubborn, and difficult to extinguish—were anything but butterflies on the wheel. We were less than dust. I feel a sympathy with the hon. Member for Edmonton and with his absent friend the hon. Member for Gloucestershire, South (Mr. Crosland) and also with the hon. Member for Stechford (Mr. Roy Jenkins)—these three redoubtable musketeers—in this battle they fight.
When they have fought with their Government in power, it has been a sham fight. They have had no effect upon the Treasury Bench or upon the Opposition. But when Her Majesty's Government is of a different character they come forward with a new story, these knights defending the small man. I say to these hon. Gentlemen, who are allies in this matter at their own invitation, that the small man has looked after himself for many centuries, ever since the days of the Garden of Eden. He can dispense with the assistance of hon. Gentlemen opposite at this stage.

Mr. Albu: Has not the hon. Gentleman forgotten that the previous Government raised the exemption limit for director-controlled companies?

Sir W. Darling: I have not forgotten that. It was hardly a concession eloquently pleaded for by the hon. Member for Edmonton and his supporters.

Mr. Albu: It was similar.

Sir W. Darling: I was interested in the observations about the size of companies which conduct certain businesses. This is an interesting speculation. Certain businesses are effective when they are small: they are ineffective when they grow larger. During the American slump it was pointed out to me by an American industrialist that the businesses that stood during the devastation of the slump were not the large businesses in the hands of the accountants, lawyers and bankers which employed 100,000 people or more.
Those businesses collapsed during the slump. The very small businesses—too small even to attract the attention of the hon. Member for Edmonton—employing perhaps two or three men collapsed because they had not got adequate capital. But the medium-sized business, personally managed, stood up strenuously against all the winds that blew. They had no special assistance from the Government of the United States any more than similar businesses in this country have special assistance from this Government.

Mr. Jay: Is it the hon. Gentleman's argument that in the near future under the present Administration we may expect a slump comparable to that in the United States in 1932?

Sir W. Darling: If the hon. Member thinks that that can be deduced from my argument, then he has even more perspicacity than I expected. If he can deduce that from my argument, then he can deduce almost anything whatever. That was not the argument.
There is in every business a suitable economic norm which is the effective organisation for the conduct of the business. If it is a tobacconist's business, I take it that the husband, the wife and perhaps the niece can conduct it. If it is a business conducting financial operations over the whole of the Commonwealth, obviously a much larger norm is necessary.
I join issue with the hon. Gentleman on the suggestion that there is any difficulty at any time in getting capital. I speak as one who had not the good fortune of having capital left to me or given to me by anyone. There is no exceptional difficulty for first-class competent business men in securing what capital


they want at any time. I know of many businesses which have failed through incompetence, ill-judgment or misfortune and bad economic circumstances. I know of very few that have failed through lack of capital.
4.30 p.m.
That is why I believe not in the cheap money but in the dear money policy. I believe that, if money is easy to obtain, it encourages persons to engage in business who otherwise would be discouraged from doing so. On the whole, a competent person who requires capital for his business can obtain it, and, in my own experience of over half a century in different parts of the world—experience not confined to this country—I have found that a first-class business man with good ideas can get an adequate supply of the capital he requires.
When the bank manager said, "No, I will not give you £1,000 or £10,000 for that project," I went away with my fears confirmed; but when he said, "Yes, if you give me your insurance policy and a couple of guarantors from your friends, I will give you £2,000," I felt that the project was all the better and stronger by reason of that fact. I have never found any serious difficulty in getting the appropriate finance for any project in which I have engaged, and I have engaged in a great many that required finance.

Mr. Jenkins: In view of the hon. Gentleman's categorical and interesting statement that no competently managed business has difficulty in getting all the capital it needs, will he explain why he

and his hon. Friends are always saying that the present level of taxation makes it impossible for businesses to carry on and develop?

Sir W. Darling: We do not say it is utterly impossible; we say it is difficult. Contrary to the Socialist view, we say that life is difficult, and that it always will be difficult. I have never accepted the theory that, by accepting the Marxist philosophy, life would become easy. I have never believed it. It is not more difficult in finance than in love or in any other human occupations. It is not exceptionally difficult for a first-class person with first-class ideas to get all the capital he requires. The existence of a thousand businesses in this country which were started, not by bank finance, but by the personal savings of the persons who inaugurated them, is proof of my contention.
Although the Chancellor is faced with the difficult problem of restoring the solvency of our country, I hope he will resist this Clause, because the Budget must be taken as a whole. While I do not agree with many individual parts of it, I accept the general philosophy of his Budget, and I shall support him in taxing footballers, cricketers, cinemas and even small shopkeepers trying to make what they can out of the difficulties of the present situation. I shall support the Government, and I think the House would be right to do so.

Question put.

The House divided: Ayes, 233; Noes, 255.

Division No. 167.]
AYES
[4.32 p.m.


Adams, Richard
Bowden, H. W.
Daines, P.


Albu, A. H.
Bowen, E. R.
Dalton, Rt. Hon. H


Allen, Arthur (Bosworth)
Braddock, Mrs. Elizabeth
Darling, George (Hillsborough)


Allen, Scholefield (Crewe)
Brockway, A. F.
Davies, A, Edward (Stoke, N.)


Anderson, Alexander (Motherwell)
Brook, Dryden (Halifax)
Davies, Ernest (Enfield, E.)


Anderson, Frank (Whitehaven)
Broughton, Dr. A. D. D.
Davies, Harold (Leek)


Attlee, Rt. Hon. C. R.
Brown, Rt. Hon. George (Belper)
Davies, Stephen (Merthyr)


Awberry, S. S.
Brown, Thomas (Ince)
de Freitas, Geoffrey


Ayles, W. H.
Burton, Miss F. E.
Deer, G.


Bacon, Miss Alice
Butler, Herbert (Hackney, S.)
Delargy, H. J.


Balfour, A.
Callaghan, L. J.
Dodds, N. N.


Barnes, Rt. Hon. A. J.
Carmichael, J.
Ede, Rt. Hon. J. C.


Barlley, P.
Castle, Mrs. B. A.
Edelman, M.


Bellenger, Rt. Hon. F. J.
Chapman, W. D.
Edwards, John (Brighouse)


Bence, C. R.
Chetwynd, G. R.
Edwards, Rt. Hon. Ness (Caerphilly)


Benn, Wedgwood
Clunie, J.
Edwards, W. J. (Stepney)


Benson, G.
Cocks, F. S
Evans, Albert (Islington, S.W.)


Beswick, F.
Coldrick, W.
Evans, Edward (Lowestoft)


Bing, G. H. C.
Collick, P. H.
Ewart, R.


Blackburn, F.
Corbet, Mrs. Freda
Fernyhough, E.


Blenkinsop, A.
Cove, W. G.
Finch, H J.


Blyton, W. R.
Craddock, George (Bradford, S.)
Fletcher, Eric (Islington, E.)


Boardman, H.
Crossman, R. H. S.
Follick, M.


Bottomley, Rt. Hon. A. G
Cullen, Mrs. A.
Foot, M. M.




Fraser, Thomas (Hamilton)
McInnes, J.
Silverman, Sydney (Nelson)


Freeman, Peter (Newport)
McKay, John (Wallsend)
Simmons, C. J. (Brierley Hill)


Gaitskell, Rt. Hon. H. T. N.
McLeavy, F.
Slater, J.


Gibson, C. W.
McNeil, Rt. Hon. H.
Smith, Ellis (Stoke, S.)


Gordon Walker, Rt. Hon. P. C.
MacPherson, Malcolm (Stirling)
Smith, Norman (Nottingham, S.)


Greenwood, Anthony (Rossendale)
Mainwaring, W. H.
Snow, J. W.


Grenfell, Rt. Hon. D. R.
Mallalieu, J. P. W (Huddersfield, E.)
Sorensen, R. W.


Grey, C. F.
Mann, Mrs. Jean
Sparks, J. A.


Griffiths, David (Rother Valley)
Manuel, A. C.
Stewart, Michael (Fulham, E.)


Grimond, J.
Marquand, Rt. Hon. H. A
Stokes, Rt. Hon. R R.


Hall, Rt. Hon. Glenvil (Colne Valley)
Mayhew, C. P.
Strachey, Rt. Hon J.


Hall, John (Gateshead, W.)
Messer, F.
Strauss, Rt. Hon. George (Vauxhall)


Hamilton, W. W.
Mitchison, G. R.
Stross, Dr. Barnett


Hannan, W.
Monslow, W.
Summerskill, Rt. Hon. E


Hardy, E. A.
Moody, A. S.
Swingler, S. T.


Hargreaves, A.
Morgan, Dr. H. B. W.
Sylvester, G. O.


Harrison, J. (Nottingham, E.)
Morley, R.
Taylor, John (West Lothian)


Hastings, S.
Morrison, Rt. Hon. H. (Lewisham, S)
Taylor, Rt. Hon. Robert (Morpeth)


Hayman, F. H.
Mort, D. L.
Thomas, David (Aberdare)


Healey, Denis (Leeds, S.E.)
Moyle, A.
Thomas, George (Cardiff)


Henderson, Rt. Hon. A. (Rowley Regis)
Mulley, F. W.
Thomas, Iorwerth (Rhondda, W.)


Herbison, Miss M.
Murray, J. D.
Thorneycroft, Harry (Clayton)


Holman, P.
Nally, W.
Thurtle, Ernest


Holt, A. F.
Noel-Baker, Rt. Hon. P. J
Tomney, F.


Houghton, Douglas
Oldfield, W. H.
Turner-Samuels, M.


Hoy, J. H.
Oliver, G. H.
Ungoed-Thomas, Sir Lynn


Hudson, James (Ealing, N.)
Oswald, T.
Viant, S. P.


Hughes, Cledwyn (Anglesey)
Padley, W. E.
Wade, D. W.


Hughes, Emrys (S. Ayrshire)
Paling, Rt. Hon. W. (Dearne Valley)
Wallace, H. W.


Hughes, Hector (Aberdeen, N.)
Paling, Will T. (Dewsbury)
Watkins, T. E.


Hynd, H. (Accrington)
Pannell, Charles
Webb, Rt. Hon. M. (Bradford, C)


Hynd, J. B. (Attercliffe)
Parker, J.
Wells, Percy (Faversham)


Irving, W. J. (Wood Green)
Paton, J.
West, D. G.


Isaacs, Rt. Hon. G. A.
Pearson, A.
Wheatley, Rt. Hon. John


Janner, B.
Peart, T. F.
White, Mrs. Eirene (E. Flint)


Jay, Rt. Hon. D. P. T.
Poole, C. C
White, Henry (Derbyshire, N.E.)


Jeger, George (Goole)
Popplewell, E
Whiteley, Rt. Hon. W.


Jeger, Dr Santo (St. Pancras, S.)
Porter, G.
Wilcock, Group Capt. C. A B


Jenkins, R. H. (Stechford)
Price, Joseph T. (Westhoughton)
Wilkins, W. A.


Johnson, James (Rugby)
Proctor, W. T.
Willey, Frederick (Sunderland, N.)


Jones, David (Hartlepool)
Pursey, Cmdr. H.
Willey, Octavius (Cleveland)


Jones, T. W. (Merioneth)
Rankin, John
Williams, David (Neath)


Keenan, W.
Raid, Thomas (Swindon)
Williams, Rev. Llywelyn (Abertillery)


Kenyon, C.
Reid, William (Camlachie)
Williams, Ronald (Wigan)


Key, Rt. Hon. C. W.
Rhodes, H.
Williams, W. R. (Droylsden)


King, Dr. H. M.
Richards, R.
Williams, W. T. (Hammersmith, S.)


Kinley, J.
Robens, Rt. Hon. A.
Wilson, Rt. Hon. Harold (Huyton)


Lee, Frederick (Newton)
Roberts, Albert (Normanton)
Winterbottom, Ian (Nottingham, C.)


Lee, Miss Jennie (Cannock)
Roberts, Goronwy (Caernarvonshire)
Woodburn, Rt. Hon. A


Lever, Leslie (Ardwick)
Ross, William
Wyatt, W. L.


Lewis, Arthur
Schofield, S. (Barnsley)
Yates, V. F.


Lipton, Lt.-Col. M.
Shinwell, Rt. Hon. E.



Logan, D. G.
Short, E. W.
TELLERS FOR THE AYES:


MacColl, J. E.
Shurmer, P. L. E.
Mr. Royle and


McGhee, H. G.
Silverman, Julius (Erdington)
Mr. Kenneth Robinson.




NOES


Aitken, W. T.
Bishop, F. P.
Cooper-Key, E. M.


Allan, R. A. (Paddington, S.)
Black, C. W.
Craddock, Beresford (Spelthorne)


Alport, C. J. M.
Boothby, R. J. G
Cranborne, Viscount


Amery, Julian (Preston, N.)
Bossom, A. C.
Crookshank, Capt. Rt. Hon. H. F. C


Amory, Heathcoat (Tiverton)
Boyd-Carpenter, J. A.
Crosthwaite-Eyre, Col. O. E.


Anstruther-Gray, Major W. J.
Boyle, Sir Edward
Crouch, R. F.


Arbuthnot, John
Braine, B. R.
Crowder, Sir John (Finchley)


Ashton, H. (Chelmsford)
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)
Crowder, Petre (Ruislip—Northwood)


Assheton, Rt. Hon. R. (Blackburn, W.)
Bromley-Davenport, Lt.-Col. W. H.
Darling, Sir William (Edinburgh, S.)


Astor, Hon. J. J. (Plymouth, Sutton)
Brooke, Henry (Hampstead)
Davidson, Viscountess


Baldock, Lt.-Cmdr. J. M.
Browne, Jack (Govan)
Digby, S. Wingfield


Baldwin, A. E.
Buchan-Hepburn, Rt. Hon P. G. T
Donaldson, Cmdr. C. E McA


Banks, Col. C.
Billiard, D. G.
Donner, P. W.


Barber, Anthony
Bullock, Capt M.
Douglas-Hamilton, Lord Malcolm


Barlow, Sir John
Bullus, Wing Commander E E
Drayson, G. B.


Baxter, A. B.
Burden, F. F. A.
Drewe, G.


Beach, Maj. Hicks
Butcher, H. W.
Duncan, Capt. J. A. L


Beamish, Maj. Tufton
Butler, Rt. Hon. R. A. (Saffron Walden)
Duthie, W. S.


Bell, Philip (Bolton, E.)
Carr, Robert (Mitcham)
Eden, Rt. Hon. A.


Bell, Ronald (Bucks, S.)
Carson, Hon. E.
Erroll, F. J.


Bennett, F. M. (Reading, N.)
Cary, Sir Robert
Fell, A.


Bennett, Sir Peter (Edgbaston)
Channon, H.
Finlay, Graeme


Bennett, Dr. Reginald (Gosport)
Clarke, Col. Ralph (East Grinstead)
Fisher, Nigel


Bennett, William (Woodside)
Cole, Norman
Fletcher-Cooke, C.


Bevins, J. R. (Toxteth)
Conant, Maj. R. J. E.
Fester, John


Birch, Nigel
Cooper, Sqn. Ldr. Albert
Fraser, Hon. Hugh (Stone)







Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Llewellyn, D. T.
Russell, R. S.


Fyfe, Rt. Hon. Sir David Maxwell
Lloyd, Maj. Guy (Renfrew, E.)
Ryder, Capt. R. E. D.


Galbraith, Cmdr, T. D. (Pollok)
Lockwood, Lt.-Col. J. C.
Salter, Rt. Hon. Sir Arthur


Galbraith, T. G. D. (Hillhead)
Longden, Gilbert (Herts, S.W.)
Sandys, Rt. Hon. D.


Gammans, L. D.
Lucas, Sir Jocelyn (Portsmouth, S.)
Savory, Prof. Sir Douglas


Garner-Evans, E. H.
Lucas, P. B. (Brentford)
Schofield, Lt.-Col. W. (Rochdale)


George, Rt. Hon. Maj. G. Lloyd
Lucas-Tooth, Sir Hugh
Scott, R. Donald


Glyn, Sir Ralph
Lyttelton, Rt. Hon. O.
Shepherd, William


Gomme-Duncan, Col. A.
McAdden, S. J.
Smiles, Lt.-Col. Sir Walter


Gough, C. F. H.
Macdonald, Sir Peter (I. of Wight)
Smithers, Peter (Winchester)


Gower, H. R.
Mackeson, Brig. H. R.
Smithers, Sir Waldron (Orpington)


Graham, Sir Fergus
McKibbin, A. J.
Smyth, Brig. J. G. (Norwood)


Gridley, Sir Arnold
McKie, J. H. (Galloway)
Soames, Capt. C.


Grimston, Hon. John (St. Albans)
Maclean, Fitzroy
Spearman, A. C. M.


Grimston, Sir Robert (Westbury)
Macleod, Rt. Hon. Iain (Enfield, W.)
Speir, R. M.


Hare, Hon J. H.
MacLeod, John (Ross and Cromarty)
Spens, Sir Patrick (Kensington, S.)


Harris, Frederic (Croydon, N.)
Macmillan, Rt. Hon. Harold (Bromley)
Stanley, Capt. Hon. Richard


Harris, Reader (Heston)
Macpherson, Maj. Niall (Dumfries)
Stevens, G. P.


Harrison, Col. J. H. (Eye)
Maitland, Comdr. J. F. W. (Horncastle)
Stewart, Henderson (Fife, E.)


Harvey, Air Cdre. A. V. (Macclesfield)
Maitland, Patrick (Lanark)
Stoddart-Scott, Col. M.


Harvey, Ian (Harrow, E.)
Manningham-Buller, Sir R. E.
Storey, S.


Harvie-Watt, Sir George
Markham, Major S. F.
Strauss, Henry (Norwich, S.)


Hay, John
Marples, A. E.
Stuart, Rt. Hon. James (Moray)


Head, Rt. Hon. A. H.
Maudling, R.
Summers, G. S.


Heald, Sir Lionel
Maydon, Lt.-Cmdr. S. L. C
Sutcliffe, H.


Heath, Edward
Medlicott, Brig. F.
Taylor, Charles (Eastbourne)


Henderson, John (Cathcart)
Molson, A. H. E.
Taylor, William (Bradford, N.)


Higgs, J. M. C.
Morrison, John (Salisbury)
Teeling, W.


Hill, Dr. Charles (Luton)
Nabarro, G. D. N.
Thomas, Rt. Hon. J. P. L. (Hereford)


Hill, Mrs. E. (Wythenshawe)
Nicholls, Harmar
Thomas, P. J. M. (Conway)


Hinchingbrooke, Viscount
Nicholson, Godfrey (Farnham)
Thompson, Kenneth (Walton)


Hirst, Geoffrey
Nicolson, Nigel (Bournemouth, E.)
Thompson, Lt.-Cdr. R. (Croydon, W.)


Holland-Martin, C. J.
Nield, Basil (Chester)
Thorneycroft, Rt. Hn. Peter(Monmouth)


Hollis, M. C.
Noble, Cmdr. A. H. P.
Thornton-Kemsley, Col. C. N


Hopkinson, Rt. Hon. Henry
Nugent, G. R. H.
Touche, Sir Gordon


Hornsby-Smith, Miss M. P.
Nutting, Anthony
Tweedsmuir, Lady


Horobin, I. M.
Odey, C. W.
Vane, W. M. F.


Horsbrugh, Rt Hon. Florence
O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Vaughan-Morgan, J. K.


Howard, Greville (St. Ives)
Ormsby-Gore, Hon. W. D.
Vosper, D. F.


Hudson, Sir Austin (Lewisham, N.)
Orr, Capt. L. P. S.
Wakefield, Edward (Derbyshire, W.)


Hudson, W. R. A. (Hull, N.)
Osborne, C.
Wakefield, Sir Wavell (Marylebone)


Hurd, A. R.
Partridge, E.
Walker-Smith, D. C.


Hutchinson, Sir Geoffrey (Ilford, N.)
Peake, Rt. Hon. O.
Ward, Hon. George (Worcester)


Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Peto, Brig. C. H. M.
Ward, Miss I. (Tynemouth)


Jenkins, Robert (Dulwich)
Peyton, J. W. W.
Waterhouse, Capt. Rt. Hon. C


Jennings, R.
Pickthorn, K. W. M.
Watkinson, H. A


Johnson, Eric (Blackley)
Pilkington, Capt. R. A.
Webbe, Sir H. (London &amp; Westminster)


Johnson, Howard (Kemptown)
Pitman, I. J.
Wellwood, W.


Jones, A. (Hall Green)
Powell, J. Enoch
White, Baker (Canterbury)


Kaberry, D.
Price, Henry (Lewisham, W.)
Williams, Rt. Hon. Charles (Torquay)


Keeling, Sir Edward
Prior-Palmer, Brig. O. L.
Williams, Gerald (Tonbridge)


Kerr, H. W. (Cambridge)
Profumo, J. D.
Williams, Sir Herbert (Croydon, E.)


Lambert, Hon. G.
Rayner, Brig. R.
Williams, R. Dudley (Exeter)


Lancaster, Col. C. G
Redmayne, M.
Wills, G.


Langford-Holt, J. A.
Remnant, Hon. P.
Wilson, Geoffrey (Truro)


Law, Rt. Hon. R. K.
Robertson, Sir David
Wood, Hon. R.


Legge-Bourke, Maj. E. A. H.
Robson-Brown, W.
York, C.


Legh, P. R. (Petersfield)
Rodgers, John (Sevenoaks)



Lennox-Boyd, Rt. Hon. A. T.
Roper, Sir Harold
TELLERS FOR THE NOES:


Linstead, H. N.
Ropner, Col. Sir Leonard
Mr. Studholme and Mr. Oakshott.

Clause 1.—(HYDROCARBON OILS, ETC.)

Mr. James Simmons: I beg to move, in page 2, line 6, at the end, to insert:
except that in the case of hydrocarbon oils used for the propulsion of invalid chairs driven by disabled persons the rate of duty shall be one shilling and tenpence halfpenny a gallon.
The House will have to excuse me for bringing it down from the Olympic heights of high finance and big business to the more human and humane subjects such as that contained in this Amendment. Hon. Members will remember that on the Committee stage of the Bill a similar Amendment was moved which

brought forth a concession to the disabled war pensioners who use motor propelled tricycles. It was a concession given by the Financial Secretary which has been appreciated by all the war disabled who have benefited from it since that date.
When he made the concession, the hon. Gentleman said quite frankly that the position regarding disabled civilians was not easy owing to administrative difficulties, and he refused to mislead the Committee by promising an easy solution of the problem. However, he promised that he would consult with the Ministry of Health to see whether some means could be found of overcoming those difficulties.
I shall not reiterate the case for granting to civilian users a concession similar to that extended to the war disabled, because there is no point in pushing hard at an open door. Noting the constellation of stars on the Government Front Bench, I am led to believe that the Financial Secretary will tell us that the combined ingenuity of the Ministry of Health, the Ministry of Pensions and the Treasury has overcome the difficulties he mentioned on a previous occasion.
4.45 p.m.
The House will remember that the Ministry of Pensions, once given the green light by the Treasury, went full steam ahead and that the payment of £3 a year to the war disabled was put into operation dating from 1st May. That was satisfying, but not surprising to those of us who know the humanity and the capability of the Ministry of Pensions. We now hope that the same concession will be granted to the civilian disabled.
As a disabled ex-Service man myself, I would not like to feel that my fellow war disabled were having an unfair advantage over those disabled in industry, through illness or for any other reason. Therefore, I hope that having already gained the thanks of the war disabled, the Financial Secretary will be able to make an announcement this afternoon about those disabled through other causes which will gain him their thanks.

Mr. George Chetwynd: I beg to second the Amendment.
I have only one request to make to the Financial Secretary, which is that if any payments can be made I hope they will be made retrospective to 1st May when the payments in respect of the war disabled came into force.

Mr. Charles Royle: I am glad to have the opportunity of supporting this Amendment, which was so ably moved by my hon. Friend the Member for Brierley Hill (Mr. Simmons). He is one who can speak on these matters with some authority because of his own disablement. I personally have nothing in the form of a like permanent disablement, but I am one of those who, like most other hon. Members, have watched men and women using these particular vehicles in the past with some sympathy,

but without a very full appreciation of what they mean to them.
It so happened that in September last I met with rather a serious motor accident and for some days during the General Election I had the opportunity of using one of these vehicles, when I appreciated more than I had ever done before exactly what they mean to disabled people, both ex-Service men and civilians; and because of that experience I feel that my sympathy is all the greater.
I would go even further and point out to the Financial Secretary—and this is an appeal made in the best possible spirit—that since that experience I have got to know something of the users of these vehicles. I find that there is an association of people using mechanical vehicles of this type. They hold week-end rallies and get a great deal of enjoyment out of getting together.
I was interested to notice a few months ago that many of them had even made a journey across the North Sea to Holland, where they held a rally with many other disabled people from other parts of Europe. If the Financial Secretary could accept this Amendment he would render a great service to those people, which would be very deeply appreciated indeed. Their disability is such that they are entitled to the full consideration of the House. I hope that the Financial Secretary will be able to say that he will adopt what is now proposed.

Mr. Ralph Morley (Southampton, Itchen): I am quite sure that there is general sympathy on both sides of the House for this Amendment and that if it were put to a free vote nobody would go into the Lobby against it. On the Committee stage the Financial Secretary made a very useful concession. He declared that he would make a grant to ex-Service users of these invalid chairs to compensate them for the increased cost of petrol due to the increased duty. Owing to technical difficulties, because the Ministry of Health had no funds at their disposal for that purpose, he would not be able to make a similar grant to civilian users of these chairs.
I think that the majority of users of these chairs throughout the country are not ex-Service men and women but people disabled in civilian life. I know that in my own local association the


great majority of the men and women users are civilians. In the country generally 4,700 people who use these chairs come under the administration of the Ministry of Health and not of the Service Departments. It would be rather invidious if help were given to ex-Service users and, because of some technical difficulty, no help could be given to civilian users. I hope that with his customary ingenuity the Financial Secretary has been able to overcome this difficulty and that he will be able to inform us that some similar concession is to be made to civilians.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I think that precisely this same Amendment was moved by the hon. Member for Brierley Hill (Mr. Simmons) in Committee on this Bill. There was then fairly general agreement to the Committee on two points. The first was undoubtedly that if it were possible to provide some assistance for all disabled persons who are compelled to use these chairs, it would be very proper to make some provision by way of compensation or relief for the increase in the petrol duty.
It was also generally accepted that the actual method advocated—no doubt partly for procedural reasons—a method which suggested a discriminatory rate of taxation related to the purpose for which the petrol was to be used, had not been found practicable by previous administrations and bristled with administrative difficulties.
Consequently, during the Committee stage I was able to announce on behalf of the Government that in the case of the ex-Service disabled person—that is, the person who is the direct responsibility of my hon. Friend the Minister of Pensions—arrangements were being made, following practice on previous occasions, to increase the cash grant in respect of chairs operated by that category of user. I announced at the time that the cash grant would be £3 in respect of the type of chair which has weather protection, and therefore does not go quite so far to the gallon, and £2 in respect of the chair without that protection. But, for the sake of the record. I ought to point out to the House that in a Written answer shortly afterwards, my hon. Friend the Minister of Pensions indicated that he had decided to level up that grant to £3 in all cases.
A number of hon. Members on both sides of the Committee were disturbed about the position of the other categories of users of these chairs—what I might call, for convenience, the civilian cases. I indicated at the time that there were severe practical difficulties in applying in their case the expedient which we had used in Service cases. I do not want to repeat the argument on that occasion, but it came in substance to this—that whereas the Minister of Pensions has the machinery for a system of cash grants to those for whom he is responsible, my right hon. Friend the Minister of Health has no such machinery. Indeed, the whole idea of relief in cash is alien to the general system of Ministry of Health administration.
But in view of the expressions of opinion on both sides of the Committee. I undertook to report those views to my right hon. Friend the Minister to see if a way round that practical difficulty could be evolved. At the same time, as I think hon. Members will recall, I gave a clear indication that there were considerable practical difficulties for the reasons which I then gave.
We have had an opportunity since the Committee stage to consider very carefully whether it is possible to deal with this matter in a way that would give some relief. For the reason that I have given we were compelled to rule out the suggestion that the system of cash grants which we had applied in the Service cases should also be applied in the civilian cases.
As I said a moment ago, the Minister of Health, although he has many powers given to him by Parliament, has no powers in connection with cash grants, but, as a result of discussions which have taken place, my right hon. Friend the Chancellor has decided that it will be possible for him to deal with the substance of the matter in another way. He has agreed, and the Government have agreed, to arrange for a free issue of an amount of petrol substantially equivalent in cost to the money grant made to the war pensioner. If I may, I will briefly describe the way in which it is proposed to effect this arrangement.
My right hon. Friend proposes to allow to the civilian user of these chairs an issue of 14 gallons of petrol a year free of charge. That is not merely free of


the increased duty, nor merely free of duty, but free of any charge at all—a free issue of that amount of petrol. Hon. Members who are better qualified for rapid mathematical calculations than I am will be able to calculate that the value of that grant comes within a matter of pennies to the £3 granted in respect of the Service disability pensioner.
This petrol will be issued at the rate of seven gallons in respect of each six monthly period. It might be of assistance if I outlined the procedure which my right hon. Friend intends to follow. A form—that is inevitable in all modern Government—will be sent to all civilian users of these chairs. If they wish to make use of the concession they will complete their part of the form and take it to the garage from which they usually draw their supply. The garage will complete the form and forward it to the regional officers of the Ministry of Pensions, who will act in this respect as an agent for the Ministry of Health.
The garage will then supply to the disabled person the specified amount of petrol free and will send the bill for that petrol to the regional office of the Ministry of Pensions for settlement These arrangements will come into force with effect from 1st July. The hon. Member for Stockton-on-Tees (Mr. Chetwynd) asked if they would be retrospective. The answer to that is, therefore, no. The result will be that this benefit will accrue to these people a few weeks later than the similar one accrues to the disabled Service pensioners, and perhaps, as the hon. Member raised the question, I might explain the reason.
5.0 p.m.
This is not a cash payment. This is a grant in kind, and the element of retrospection which is sometimes appropriate in the case of cash grants is obviously less so in the case of grants in kind. There is also the practical reason, that this is to be on a six monthly basis. The 1st July is the beginning of the first six monthly period after this concession has been decided upon. Therefore, while this grant is not in the strict sense retrospective—that is my answer to the hon. Gentleman—it is, in fact, being operated from the beginning of the first half yearly period after the decision has

been taken, and, therefore, there is a few weeks difference which I think is substantially fair.

Mr. Chetwynd: I am perfectly satisfied with that arrangement.

Mr. Boyd-Carpenter: I am obliged to the hon. Gentleman for that expression of his views.
This arrangement will, as I have said, come into operation on 1st July. I think the House will wish to congratulate my right hon. Friend the Minister of Health on having so speedily found it possible to overcome real administrative difficulties in order to do what was manifestly the wish both of this House and of the Government and also to do something to help people for whom all hon. Members have a very proper sympathy and understanding.

Mr. Eric Fletcher: I am sure that everybody who has listened to the speech of the Financial Secretary will be very glad that this concession has been made. We not only congratulate the Minister of Health on his ingenuity and on having found a method of giving effect to this proposal, but I am sure that all hon. Members who have been so persistent in pressing this matter will be particularly glad that as a result of their persistence this remedy has been found. I have no doubt that all civilian users of these invalid chairs will be glad to know that there is not to be any indiscrimination between their use of invalid chairs and those who come within the sphere of the Ministry of Pensions.
There is one point which I should like to put to the Financial Secretary. He told us during the Committee stage, when this matter was under discussion, that legislative powers would be required to enable the Minister of Health to make cash payments. I gather that he is satisfied that the proposal which he has now announced can be carried out in this way without any new legislation, and I take it that we may also assume that as the Minister of Pensions will be acting in this respect for the Minister of Health, this will come on the Ministry of Pensions Vote and not on the Ministry of Health Vote.
Unless that is the case, I am not clear how it is consistent with the Government saying that new legislation would be required to enable the Minister of Health


to make a cash payment, when this can apparently be done without legislation because what is being given is not cash in the form of cash but the value of cash, namely, £2 or £3 worth of petrol. I do not see why legislation would have been required in one case and not in the other, but I have no doubt that the Government have looked into the matter and have satisfied themselves that it is free of any Parliamentary complications.

Mr. Boyd-Carpenter: If I may have the leave of the House to reply to the points which have been raised, the first question was whether legislation would be needed. The answer is, no. The second question was, upon which Vote would the cost be borne. The answer is that it will be borne on the Vote of my right hon. Friend the Minister of Health. The payments to the garage will be made by my hon. Friend the Minister of Pensions as agent for my right hon. Friend, but the Minister of Pensions will then recover the amount from the Minister of Health who is responsible to Parliament for this matter.

Mr. Simmons: Before asking leave to withdraw the Amendment, I should like to express my thanks to the Financial Secretary and the Minister of Health for the ingenuity which they have displayed in making this concession possible. If one wanted to be partisan one could refer to forms and things like that, but I do not think that the disabled are interested in partisan speeches.
We could have hoped that there might have been a simpler way of doing this, but we must not look a gift horse in the mouth. So long as the disabled are getting the value of the £3 grant already enjoyed by the Service disabled I think we are satisfied. I and my hon. Friends thank those responsible for working out the scheme, and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2.—(CLASSIFICATION OF ENTERTAINMENTS FOR PURPOSES OF ENTERTAINMENTS DUTY, AND RATES OF DUTY.)

Mr. Boyd-Carpenter: I beg to move, in page 2, line 29, after "in," to insert "Part I of."
As you will be aware, Mr. Deputy-Speaker, this is the first of seven Amend-

ments to the Clause and the first of two Amendments to the First Schedule, and it is also the first of the Amendments which relate to the Government's proposals for the revision of the Entertainments Duty on cinemas. I understand that it would be convenient to the House if a general discussion upon these proposals were to hang upon this first and somewhat inconspicuous Amendment.

Mr. Hector McNeil: We shall be delighted if the Chair permits this procedure, but I should like to be satisfied on one point. I hope that it will prove completely unnecessary for us to move an Amendment which appears at a later stage, but should it prove necessary to move it I should like to know whether it would be possible for us to do so, in order to keep the situation tidy.

Mr. Boyd-Carpenter: Is the right hon. Gentleman referring to the Amendment to the Schedule?

Mr. McNeil: Yes.

Mr. Deputy-Speaker (Sir Charles MacAndrew): I do not quite follow. To which Amendment is the right hon. Gentleman referring?

Mr. McNeil: There is an Amendment—in fact, there are four—in my name and the names of several of my right hon. and hon. Friends to the proposed Amendment of the Chancellor of the Exchequer, in the First Schedule to insert a new table of rates of duty. This Schedule hangs upon the Clause to which the Financial Secretary is moving this Amendment. If it would be in order, I would join with him in submitting to you, Mr. Deputy-Speaker, that it would be convenient and probably quicker to take this discussion all in one gulp, as it were, but I should like your assurance that it would be appropriate in this part of the debate if necessary for me to move these, or at any rate one of these four Amendments to which I have just referred.

Mr. Boyd-Carpenter: Subject to your wishes, Mr. Deputy-Speaker, I think the right hon. Gentleman's suggestion would be wholly convenient; that is to say, that the discussion should take place on this Amendment. We could discuss the Schedule and, no doubt, the subject matter of the right hon. Gentleman's


Amendments to our proposed Amendment to the Schedule, but subject to your permission those Amendments would be called when we reach the Schedule for the purposes of Division if so desired.

Mr. Deputy-Speaker: Yes, I imagine that when we reach the Amendments of the right hon. Member for Greenock (Mr. McNeil), one Division will be all he will want. The four Amendments go together. I can see no objection to that myself, and if the House wants to talk about the Entertainments Duty on this present Amendment I have no objection.

Mr. E. Fletcher: With a view to clarifying the matter, may I put this point? If we have a general discussion, as has been suggested, both on the Amendments to Clause 2 as well as on the very elaborate Amendment in the name of the Chancellor of the Exchequer, setting out a new table to the first Schedule, then, of course, it will depend very largely on what is said in that discussion whether the Amendments in the name of my right hon. Friend the Member for Greenock (Mr. McNeil) are, in fact, moved by him. I should imagine that it would then be open to those who may want to vote on these Amendments in the Schedule to vote either at the end of the general debate or when the Schedule is reached, as may be convenient to those interested in the Amendment.

Mr. Deputy-Speaker: By our rules we cannot vote on the Schedule until we reach it on the Order Paper.

Mr. Harold Wilson: As I understand, what is proposed is that for the convenience of the House we should now have a general debate embracing the subject matter of the Chancellor's Amendment on the Schedule and our proposed Amendments to that Amendment, as well as the Amendment which stands next on the Order Paper and which is now before us.
Would I be right in supposing that when we reach the end of this general debate, if, by some unhappy mischance, the hon. Gentleman's proposals are not satisfactory to the House, at that stage we could vote against the Amendment which is now immediately before us on the Order Paper and then, at the right

moment, when we reach the Schedule—perhaps somewhat later this evening—we shall be free to vote against the Chancellor's Amendment in the Schedule and also to move Amendments to the Chancellor's Amendment at that time and to divide then, if necessary, as well as at the end of the general debate?

Mr. Deputy-Speaker: All the Questions will have to be put separately on the Government Amendments, and the House will be free to vote for or against them as they are inclined. I think that the Amendments in the name of the right hon. Member for Greenock (Mr. McNeil), all go together and that one Division will be enough, without further discussion.

Mr. Boyd-Carpenter: I am sure that the House will be grateful to you, Sir Charles, for having permitted what is obviously the convenient course in the discussion of this fairly wide topic. The seven Amendments to Clause 2—the first of which I am now, in form, moving—go with the two Amendments, one formal and one of substance, to the Schedule which begins to appear at the bottom of page 1823 to the Order Paper.
The House will recall that on the Committee stage the subject of the appropriate rate for Entertainments Duty and schemes was discussed at some considerable length on an Amendment which, if I recall rightly, was moved by the hon. Member for Nottingham, Northwest (Mr. O'Brien). During that debate I indicated that while the Government must resist that Amendment on the grounds that it would involve an appreciable loss of revenue to the Exchequer we were quite prepared to consider, between then and this stage of the Bill, any representations on the subject which might produce a scheme which would be more convenient for the industry but would not have the defect of involving the Exchequer in any substantial loss.
That willingness to consider representations produced a fairly rapid reaction and shortly after that I had the pleasure of receiving a deputation from the industry. Though the scheme which they then put forward would have involved less loss to the Exchequer than the scheme which was put forward in the Amendment moved by the hon. Member for Nottingham, North-West, it still


would have involved an appreciable loss and I was therefore compelled to tell the industry that that scheme was not acceptable. They were then good enough to indicate that their resources were far from exhausted and that they were prepared to put forward further proposals. Further discussions have taken place up to and during the last few days, which have resulted in the appearance of these Amendments on the Order Paper.
5.15 p.m.
I should like to make two general comments. First, to prevent any possibility of misunderstanding, I should like to say that the changes proposed by the Government in the scale of this duty do not involve any alteration in the arrangements under which the exhibitors have agreed to pay a levy to assist British film production. What is colloquially known as the Eady plan remains, in effect, on precisely the same terms as before.
Secondly, I should like to express my apologies to the House for the fact that these complicated and lengthy Amendments appeared on the Order Paper only just before the week-end. I am bound to say that I am not at all sure whether it is appropriate, as a matter of general practice, that proposals of this kind should be brought forward on the Report stage of this Bill; but this year—and, as it happens, in the last two years—it has not been possible to obtain the final views of the industry until almost the last minute.
I imagine that the House as a whole will be inclined to feel that we cannot be expected to make a regular practice of dealing with the entertainment problems of the cinema industry on the sort of basis that they are unforeseeable emergencies which have to be introduced and which involve the introduction of Clauses to deal with them on the Report stage of the Finance Bill. They are not matters which should be left to the last minute, and I hope that this is not the type of thing with which we shall have to burden the House at this stage on any subsequent occasion.
Having said that, I should like to explain the proposals to the best of my ability. With the exception of one particular feature, to which I will refer in a few minutes and which is designed to assist the smaller cinemas in particular, they do not involve any appreciable loss

to the revenue. On the other hand, they are designed to meet—and we are assured by the industry that they do meet, in considerable degree—the desire of the industry to have greater flexibility in the pricing of seats.
The present system of imposing the duty, with its fairly widely spaced stages in the rates, does make small adjustments in the prices of seats at a good many points not really worth while to the operators. It therefore introduces—as I think most Members who have studied this problem would agree—a degree of rigidity, inasmuch as the operators are inhibited from fixing freely the prices which they feel should be charged on ordinary business grounds for the sale of their seats.
We have certainly been impressed by the views expressed by the industry to that effect. While, obviously, the industry would prefer schemes which would cost the Exchequer substantial sums of money, they have indicated to us that if that cannot be agreed they do regard these proposals, which have been evolved in consultation with them, as a great advance on the present system from their point of view.
In view of the undertaking which I gave on the Committee stage—that if we could get over the difficulty of the possible loss to the Revenue we should be prepared to consider these proposals—the Government thought it right to submit them to the House. As hon. Members will no doubt assume from what I said, and as they will see from a glance at the Order Paper, and in particular at the Amendments to the Schedule, the new scale does involve far more frequent stages in the incidence of the duty.
By way of illustration I should like to explain this and its advantages with particular reference to what happens at the level of the seat priced at 1s. 6d. and above. Under the present system, the exhibitor who charges 1s. 7d. for a seat retains in his own pocket, after payment of duty and levy, less than if he charged 1s. 6d. for a seat. It is not surprising, therefore, that the 1s. 7d. seat is a little difficult to find. Under the present system the operator who charges 1s. 8d. for a seat retains in his own pocket precisely the same sum as an operator who charges 1s. 6d. If, therefore, an operator finds it uneconomic to charge 1s. 6d., he


cannot increase the returns into his own pocket except by raising the price from 1s. 6d. to 1s. 9d.
Under the proposals set out in the proposed Amendment to the Schedule, on the 1s. 6d. seat the operator will retain 11¾d. after allowing both for duty and for levy. That is the same as at present. On the 1s. 7d. seat he will retain 11¾d. instead of 10¼d., on the 1s. 8d. seat he will retain 1s. instead of 11¼d., and on the 1s. 9d. seat he will retain 1s. 0¼d., which is the same as at present.

Mr. H. Wilson: I am sorry, but I did not follow the hon. Gentleman. Can he give us the figures for the 1s. 6d. seat under the new proposal? I thought he said 11¾d.

Mr. Boyd-Carpenter: It is 11¼d. If I said 11¾d. it was a slip of the tongue.
Hon. Members will see that the effect in this range of the duty is that while the tax on the 1s. 6d. seat remains as at present the tax on the 1s. 9d. seat remains as at present, the tax is now graduated so that the operator who charges 1s. 7d. does not have to pay so much more duty as to reduce his net receipts below what they would be if he charged 1s. 6d.
That is an illustration of the problem with which we have been trying to deal, and I hope I have succeeded in making it clear to the House. That is, in general, the advantage which the industry believes it will receive from this new scale.

Mr. Jay: When the hon. Gentleman speaks of the industry at this stage of the argument, does he mean the exhibitors or the exhibitors and the producers?

Mr. Boyd-Carpenter: The people directly concerned are the exhibitors. As the right hon. Gentleman knows, the producers are closely connected with this, both directly, from the ordinary point of view of the customer and buyer, and, equally, through the working of the Eady plan. When I use the expression "industry" in connection with the pricing of seats, I am, of course, referring to the exhibitors—[An HON. MEMBER: "The trade."] Well, the trade, if the hon. Member prefers that term, although I think that they themselves use the expression "industry," which perhaps they feel is more dignified. I do not

think it matters very much. This simply means a re-arrangement of the incidence of the duty so as to give greater flexibility in the pricing of seats to the industry, while securing that the Exchequer does not have to incur any appreciable loss of revenue.
There is one further aspect of the matter to which I would invite the attention of the House, and that is the proposal which we make in this Schedule with respect to seats which are priced at 9d. The industry or trade, which ever right hon. Gentlemen opposite prefer, attaches great importance to the 9d. seat from a point of view which is not without public importance, that is to say, the financial position of the smaller cinemas.
I understand that in the case of the smaller cinemas which are in urban or rural districts the 9d. seat is a very important factor in their economy, and for that reason the industry put forward proposals which are, I think, on the lines of those of the Amendment of the right hon. Member for Greenock (Mr. McNeil), that the duty on the 9d. seat should be waived altogether and that the 9d. seat should be made free of tax. The main objection to this proposal is the cost. It would cost £400,000, which is an appreciable loss of Revenue.

Mr. McNeil: Would I be troubling the hon. Gentleman too much if I asked him to explain the basis of his calculation that the remission of 1d. in this case would cost £400,000?

Mr. Boyd-Carpenter: It is based on the various figures submitted by the industry and it is the best view that we can form of the effect of this proposal. What we have done is to meet them half-way. If hon. Members will look at the Schedule they will see that we propose a reduction in the rate of duty on the 9d. seat by a halfpenny to a halfpenny; that is to say, to reduce it from a 1d. to a halfpenny. The cost of that concession will be, as indeed is mathematically obvious, £200,000 in a full year. That means that these proposals involve, over all, a net reduction in the yield of the duty of £200,000.
We feel that in the present circumstances of the country that is a very substantial contribution to make, and we have felt able to make it only because my right hon. Friend is anxious to do


something, if he can, to assist to solve the problems of the smaller cinemas. It is, I think, generally agreed, and it is certainly the view of the industry, that the smaller cinemas are interested, in particular, in the 9d. seat, and it is felt, therefore, that what help is available to be given can, from their point of view, be most effectively given by concentrating it upon the 9d. seat. In the circumstances, that is as far as my right hon. Friend feels able to go this year.
If I may say a few words on this aspect, we have had some evidence, by no means of a comprehensive character, that a certain number of the smaller cinemas are facing financial difficulties. It is far from clear to what extent the duty is a major factor in those difficulties, but we do not wish to see those smaller cinemas carrying an unfair burden to the risk, perhaps, of their continuance, and we therefore feel that it is right to recommend to the House that, even in the present financial circumstances of the country, the substantial sum of £200,000 a year should be made available to assist them.
There is no doubt at all, from the representations we have had, that this assistance can best be given by concentrating it upon the 9d. seat.

Mr. Ellis Smith: Did the trade accept that?

Mr. Boyd-Carpenter: Their final proposals were to concentrate the full relief which they wanted—£400,000—on the 9d. seat, and it was, therefore, quite clear that if we did not feel able to go as far as that, nevertheless a contribution in that direction would be regarded by them as most appropriate from the point of view of the smaller cinemas. It is with that intention that we have made this departure from the views which we had previously held that it would not be possible to make any concession in the total yield of Entertainments Duty from cinemas in the present year.
The Amendments which I have been discussing raise two distinct issues. They raise, first of all, the issue as to whether it is right, without cost to the Revenue, to meet the wishes of the industry for greater flexibility in pricing or in altering the incidence of duty at different points and introducing more points of change. That is the main effect of the Schedule. But, as I have mentioned in the last few minutes, it is the effect of the provision

made in respect of the 9d. seats that we make in that case a straight remission of duty to the extent of a halfpenny, or 50 per cent., on the 9d. seats in all cinemas throughout the country.

Mr. James Carmichael: The Financial Secretary indicated that there would be a gain of something like £200,000 to the trade as a result of the rebate on the 9d. seat. As a result of the introduction of the prices 1s. 7d. and 1s. 8d., which did not exist before, what is likely to be the approximate increased Revenue to the Treasury as a result of the change in those prices?

5.30 p.m.

Mr. Boyd-Carpenter: So far as we can calculate, the variations in the rest of the scale will, in substance, cancel out. We are not anticipating any increase in revenue from that source—nor. I hope, any decrease

Mr. McNeil: The House will be grateful in some part, at any rate, for the concession which the hon. Gentleman has explained. It is undoubtedly true that the lack of flexibility, the hopelessly illogical arrangement of prices and duty had meant that the industry—the exhibitor—laboured under very considerable difficulties—and the public, of course, was in some part discomfited, to.
My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) indicated last year that he meant to address himself to this problem, and I have no doubt that, had he been given a chance, he would have come very near to some such scheme as we have been offered tonight in relation to prices above 1s. 6d. However, the hon. Gentleman will scarcely anticipate that we on this side of the House will excuse all the other faults in his attitude in virtue of that.
The House will remember that when the hon. Gentleman considered this subject in the Committee stage he met pleas from both sides of the Chamber by saying—and I hope that I am not misrepresenting him—that if the figure looked like £500,000 and meant there would be an improvement in flexibility and an easement for that part of the industry most sorely pressed, we should not find him unreasonable. Well, I suggest that he falls a little short—not of his promise, because I do not think I am entitled to call it a


promise—but of the very pleasant display of Parliamentary manners which he gave us at the Committee stage.
He falls short in at least two ways. First of all—and this concerns most of us—he goes only half way towards relieving what is undoubtedly the most pressing question in the industry. I recall the figures that I did ask the hon. Gentleman to explain when he offered them. I must say I am a little puzzled by them. I was trying to do what was some very inadequate mental arithmetic at the time. I find that there are 55 million admissions at 9d. If I make that deduction of ½d. I certainly do not come to the figure of £200,000. I come to a figure rather nearer £120,000.
Moreover, if the hon. Gentleman has beside him a minute of the meeting which was held with the trade on 29th May—I must agree it is not an agreed minute, but I have no reason to doubt it is an accurate minute—he will find the figure quoted there, and not disputed, for the total remission on 9d. with the consequential adjustment as £300,000. I must make it plain, in fairness to the hon. Gentleman, that I am not quoting from an agreed minute. There could have been a mistake. We all know that there has been a great deal of dispute about these figures from time to time.

Mr. William Shepherd: Does the right hon. Gentleman not visualise the circumstance that, if there were a remission of the duty entirely on the 9d. seat, a number of seats previously higher priced might become 9d.?

Mr. McNeil: Well, let me address myself to that. It would be unlikely that there would be a movement down from 1s. to 9d.

Mr. Shepherd: Tenpence.

Mr. McNeil: The hon. Gentleman says 10d. I am rather like the hon. Gentleman in that I do not pride myself very highly on my ability to do mental arithmetic—especially not before such a critical audience; nor do I pretend to be completely familiar with these figures. But the hon. Gentleman, if he is familiar with the admissions, and with the Amendments we have down on the Order Paper, will know that, for that very reason, we have proposed that a consequential adjustment should be made in relation to the 10d.

That was the proposal that was discussed at this meeting on 29th May to which I am referring, and the figure there was £300,000.
But suppose we push it a bit further. Even if we take the hon. Gentleman's figure and put it at £400,000 it still falls comfortably inside the figure which I, not without design, did offer at the Committee stage. Is it an unreasonable figure? The hon. Gentleman says, of course, with a piteous cry that I could not fail to understand. that he is very concerned about making any remission at this time. Well, he and his right hon. Friend have made some quite surprising admissions in meeting us, and so the principle has been established.
What is the dimension of this remission for which we plead? It is £400,000 out of a total revenue to the Treasury of £41 million or thereabouts from this industry. That is not a startling figure—£400,000 out of £41 million. Quite plainly, if the hon. Gentleman is impressed by the case that has been made of the danger to the small exhibitor he will really think again to find out if he cannot find this £100,000 or £200,000 which is needed to meet our plea and our Amendments.
The hon. Gentleman will appreciate that most of the people whom he was good enough to meet were not people much affected themselves by this class of seat. My hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) quoted a figure which was endorsed by the right hon. Gentleman the Member for Torquay (Mr. C. Williams) opposite—that there were between 2,500 and 3,000 exhibitors in this country with seats of 500 in all——

Mr. Charles Williams: I said that? I should like to know where I am being quoted from.

Mr. McNeil: I was quoting from memory, but I am usually fastidious about these things. If the right hon. Gentleman finds any difficulty in remembering what he said I will quote him in extenso:
The real point is that the small owners, whose cinemas accommodate about 500 people, have to bear a burden of something like 40 per cent. of their takings for taxation, another 40 per cent. for the cost of films, and they are left with something like 20 per cent. for wages and their profits."—[OFFICIAL REPORT, 6th May, 1952; Vol. 500, c. 296.]


I may be at fault in thinking that the right hon. Gentleman accepted that there were 12,500 small exhibitors, but he followed my hon. Friend and joined the same case and did not dissent from those figures. I hope that I have done him no injustice.
The small exhibitor—the man we are talking about who derives his living from the 9d. and 10d. seats, who seeks round about 55½ million attendances—is perhaps, at any rate in some proportion, to be confronted with raising his prices to an already hard-pressed public or shutting his doors; and this for perhaps £100,000 or, at the very most, £200,000. My hon. Friend the Member for Nottingham, North-West is, unhappily, not able to take part in this debate. He is paired with the Minister of Labour although he had hoped to be here. But they are both kept in Geneva, dealing with a troublesome convention relating to labour conditions.
He writes to me saying that from his intimate knowledge of the industry he knows that the employer and the employee will be embarrassed if the Amendment is not accepted. He goes on to say that the producer may not be unaffected if the Amendment is refused. He means, of course, and this is the second leg of the argument, that the whole House is concerned to see that the British producer is safeguarded and assisted by the efforts of the exhibitor. The exhibitor voluntarily accepts the making of a ¼d. contribution towards the Eady levy on these 9d. seats, and if the seats go out of existence it is probable that there is no other way in which that part of the Eady levy can be replaced.
I repeat that I will not vouch for my figures. The hon. Gentleman knows that I offer them in sincerity and after examination. I think that to meet our Amendment would probably cost an additional £120,000 to £130,000. I do not think the House will consider that unreasonable. I repeat not only is it significant for the small exhibitor but, of course, it is for the employees, and on Committee stage we had figures offered to show that these employees were indeed hard-pressed and, in many cases, not at all well treated. I repeat that it may have some reference to the film production industry of this country.
The House, or at any rate my right hon. and hon. Friends, find it exceedingly difficult to understand why this sector of the entertainments industry should be discriminated against, compared with other entertainments such as football, greyhound racing, speedway, and so forth. I made no grumble about the comparatively better conditions which those sports enjoy. But we on this side of the House feel that it is unjustifiable discrimination, not only against these exhibitors, but against a very large section of the humblest people in our community that they should be attacked in this way. It is not worthy that the hon. Gentleman should make no attempt at justification for this discrimination either tonight, or at an earlier stage.
I hope that before we dispose of this series of Amendments he may be persuaded to change his mind. In frankness to the House I must say that unless he does I shall ask my hon. Friends to go into the Division Lobbies at the appropriate time. Having gone quite a little way, why does the hon. Gentleman hesitate, when he could carry the House with him and for such a comparatively small sum could approach very near to doing justice?

5.45 p.m.

Mr. W. G. Bennett: I wish to ask the Parliamentary Secretary to reconsider the position. At Whitsun I spent a few days in a little place in West Scotland called Oban. It was busy pre-war. There were two cinemas, one up-to-date with a restaurant and tea rooms, etc., and the other a very small wooden hut or shed. They are both hanging on and doing their best at the moment to carry on by running a change of programme three times a week.
The Parliamentary Secretary will under-stand that a modern cinema would never try to change the programme three times a week, by showing one programme on Monday, one on Wednesday and another on Friday, unless patrons were few and far between. People have to travel miles to get in for a little amusement once, or perhaps twice a week. There were three prices of admission. The top price was 2s. 10d. and it was possible to count on one's hands the number of people in the top price seats. In the 1s. 6d. seats there were very few people but the majority of the 9d. seats were occupied.
In circumstances such as this it is very difficult for a cinema to carry on and I would emphasise that it is in circumstances such as this that a remission of tax is so necessary. In my own constituency I think there are 10 or 12 cinemas, but the majority of the seats are 9d. seats. There are no high-priced seats and I think it most unfair, to put it mildly, that other forms of entertainment should be tax-free while some one who goes to the cinema has been asked to pay a 1d. contribution to the Exchequer, and will be asked to continue to pay a contribution of ½d. to the Exchequer.
I should like the Parliamentary Secretary to give the House some figures. I have asked the trade for figures and I am told they are prepared to stand by these figures; that the number of 9d. admissions last year was 55,800,000. That means that the increase to the Exchequer was £233,000. If those figures are correct and I am told that they are the whole build-up for the retaining of the ½d. disappears, and the Parliamentary Secretary would be within only £33,000 of giving the whole Id. remission. I am told that the trade are prepared to stand by those figures for the whole case.
The Parliamentary Secretary would be benefiting a tremendous number of people who would appreciate this remission. It would allow them to have a better seat and for the cinema exhibitors to do something for them. I am certain that it would be very much appreciated throughout the country and I would ask him to reconsider the matter favourably.

Mr. John Rankin (Glasgow, Tradeston): I should like to add my voice to the plea that has been made by my right hon. Friend the Member for Greenock (Mr. McNeil) and the hon. Gentleman the Member for Woodside (Mr. W. G. Bennett). I do not want to repeat all the arguments on which we embarked during the Committee stage. I think that the Financial Secretary will agree that he gave us reason to believe that if a reasonable scheme was submitted to him it would have his very close consideration, and he gave us the hope that he would be agreeable to such a scheme. I believe that that scheme was submitted, and I understand that the cost to the Exchequer was in the region of £200,000

or £300,000. I am not quite sure of the figure; it may have been more.
It would seem that what is now proposed will cost the Exchequer something like £200,000, and I should like to express my own disappointment with the scheme now before us. I think it covers two points. We made a claim during the Committee stage that the Financial Secretary should look with sympathy at our plea that seats up to 9d. should be free of tax altogether. He has gone some way to meet us, and he is taking a halfpenny off the tax. For that, of course, we express our gratitude even if it may be somewhat diluted.
The second point is that he has altered the incidence of the tax on the higher priced seats, that is, the seats above 2s. 1d. As a result of his decision, he is giving to the circuits and to the super cinemas a flexibility which he is denying to the small exhibitors in the working-class areas. It is with those that I personally am concerned, because practically every cinema in my own constituency, which is almost a wholly working-class division, is of the small type where the admission prices are 7d., 8d., 9d. and 1s. I feel that by his decision, the Chancellor is giving a consideration to the large cinemas which he is denying to the working-class cinemas in areas such as mine. I should like him to look at that matter again.

The Chancellor of the Exchequer (Mr. R. A. Butler): I was under the rather pathetic impression that by reducing the tax on the cheaper seats I was helping those with the least money.

Mr. Rankin: Actually what the Chancellor has done, so far as these cinemas are concerned, is not to achieve the purpose, however desirable, which he set before himself.
The third point on which I should like to make my protest is that he still retains the principle of discrimination. When my own party were in power they did not discriminate between dogs, horses and cinemas. They treated them all from the tax point of view in an equitable fashion. This discrimination has now been introduced by the present Chancellor, and is being persisted in by him in spite of all the appeals to the contrary that we have made.
I want him to bear in mind that in divisions such as those represented by the hon. Gentleman the Member for Woodside and myself, and in working-class divisions all over the country, when August comes, they will be faced with the fact that in other recreations, such as football, which is largely supported in my own division, the admission cost, in all probability, will be going up to 2s. While the cost of living and the cost of recreation rise, the Chancellor of the Exchequer, at the same time, is making appeals to organised workers not to press for wage demands in order to meet these increases, while he refuses to mitigate the harsh effects of his policy by giving such a small concession as we are suggesting at the present moment.
I do not think that this concession would cost the Exchequer much more than £100,000, and, in these days, that is not something which should worry him very greatly. I should like to point out one other result of his decision. He has suggested for the 1s. 3d. seat a 4d. tax and out of that, of course, the producers will be asking for ¾d. levy. This means that the exhibitor will get 10¼d., while the 1s. seat will give him 9¾d. so he will get, under this scheme, a halfpenny more from the 1s. 3d. seat than he will get from the 1s. seat.
That means that the Chancellor offers to him the prospect of putting up his price by 3d. in order that he may get a halfpenny more, but the Chancellor is to get 2d., so he is saying to the exhibitor, "You collect the odium and I will take the dough." He is asking the cinema exhibitor to take the rap and the Chancellor will collect the money.
No cinema exhibitor likes to increase his prices because the public do not look to what is happening behind the scenes, and I feel that the Chancellor is making a somewhat unfair use of the cinema exhibitor to increase his own revenues by this ingenious little dodge. Now I have exposed the evil of his ways, I hope that he will be led along a better path than the one he is treading.
When I think of what the Financial Secretary is doing at the present moment, my mind goes back to the days when he sat on this side of the House, and I feel quite certain that if he were here this afternoon no one would be condemning the ways of the Chancellor more

vigorously than the present occupant of the Financial Secretaryship on the Front Bench opposite. I think of another famous speech and I wish this afternoon that I were Brutus because then I might use adequate language to denounce this unfair treatment, not merely of the cinema exhibitors, but of the working-class people of this country.
I ask the hon. Gentleman to give further consideration to the case which we have made out.

6.0 p.m.

Mr. C. Williams: I very much regret, and I apologise to the Financial Secretary, that I was not able to hear the whole of his remarks. did, however, hear one or two things which enabled me, at any rate, to conclude that so far as he was concerned we are dealing with an extremely complicated matter.
But there is one thing which is not at all complicated, and which seems perfectly simple to understand. At present, a considerable number of the smaller cinemas are going out of action or are being absorbed by the big cinemas, both of which are fundamentally bad. In a large proportion of the cases which have been gone into—they are only very few, I believe—it was found that overhead charges and various other matters of that sort were extremely heavy and that their proportion of taxation was very heavy indeed.
My hon. Friend said that he had gone some way to meet those people. I thank him very much indeed. I only hope that the distance which he has gone to meet them will really help them. I think it will help to a certain extent, but, on the other hand, I am not at all sure that it will not help their big competitors very much more. At any rate, I welcome my hon. Friend's intention to help them and I welcome the fact, as I understood from the latter part of his speech, that he would like more exploration into this matter with a view, probably, of putting the whole thing right next year.
It would be a very small thing to say, "Let out the whole of the small cinemas"—which, I believe, number rather more than 300—"which are not already exempt." That is a small thing, but it would affect a considerable number of the smaller concerns rather than the large cinemas. Would it not be possible, even


now, in some way to go rather further to meet these people, so that my right hon. Friend would then have a strong case for being able to say, "I did not take so much notice of the bigger chap, but I have, at the last minute, made a special concession and said that the first £150"—or whatever sum the Chancellor might like to think of—"of their takings per week could be completely exempt from taxation." After all, my right hon. Friend has been appealed to in a very friendly way from this side of the House, and in a comparatively friendly way from the other side. If he could go that much further now, he would be making a concession which would not cost a very large sum of money.
I am the last person to press the Exchequer to give concessions of this kind, but when I think of some of the concessions which have been made from time to time, I realise that this is one of the worst examples of small people all over the country being put out of business. I came across a Member of Parliament only yesterday who had the same complaint from Wales. There is a small bunch in the West country, all in one area, and we have just had two illustrations from Scotland.
For that reason, I ask my right hon. Friend the Chancellor, who has gone so far, to go that little way further. He has an opportunity of following the soundest of all Tory principles: that is, always to look after the small trader first. He could make this concession in a Bill which, in the main, helps the large producer or exhibitor. If he could go a little further, he would be making a considerable concession to the small cinemas, and by that means would undoubtedly be doing something to help not only the smaller people and the working-class or country areas; sometimes it is the smaller residential areas that are affected and which, quite by accident, have been cut out entirely from the main exemption.
I thank the Treasury and my hon. Friend the Financial Secretary for having gone further towards meritoriousness. But it is much better to have the whole garden meritorious rather than just a little bed on one side and the other side completely without vegetation. I am asking my right hon. Friend to make the whole garden meritorious, which would

cost only a couple of hundred thousand pounds or so, so that he may go out from this debate a really meritorious hon. Gentleman.

Mr. William Ross: The Financial Secretary can hardly be gratified by the reception which has been accorded to what he probably thought was a fairly generous gesture and one which was likely to be welcomed. What are the facts? What has he done? Without sacrificing very much revenue, he has made re-arrangements which would permit some flexibility in fixing prices over 1s. 9d., and on the other hand he has gone a small way to meet some of the demands that were made on the Committee stage regarding the 9d. seats. He may think that we should thank him for small mercies. The reason for our receiving it in the way in which it has been received is because the mercy is very small indeed.
One of the facts which we must take into consideration is that, from the Chancellor's point of view, this industry is one of the most important, providing him with as much as £41 million. The second is the amount which it would cost the Chancellor if he went the whole way to free the cheaper seats, and at the outside we understand that it is a matter of £200,000. It should be remembered that the benefit from that £200,000 is going to be scattered throughout the whole industry. We are not talking of the big exhibitor within a hundred yards or so of Piccadilly Circus and Leicester Square, but of the small cinema owner in a rural area who has been struggling for years against rising costs, not to try to get a better form of entertainment or better conditions for the patrons, but to keep going at all.
It is all very well during debates on agriculture to talk about getting the people back to the countryside, but we must provide them with the facilities. Here are facilities which are not as good as we should like them to be, but which, unless we take cognisance of what has happened, will disappear altogether because of rising costs, the need for the replacement of furnishing and all the other things that go to add to the expense. Many of these small cinemas are going out of business, and, taking that fact into account, the concession amounting to £200,000 at the outside is not very great.
The Financial Secretary was very voluble on this subject when he was on this side of the House. I hope that now he will use his power and influence on behalf of these people. This service in the rural areas is really necessary, and if we are sincere in our protestations about giving help to the countryside, then here is our chance to do it.
There is the other point which has already been mentioned, that there is no other form of entertainment in which a tax is levied on any payment of 9d. From the point of view of equity in the Entertainments Duty, he should be prepared right away to accept the principle of a 9d. seat free of tax altogether. Not one voice has been raised in support of the Government on this subject. There have been two speeches from the Government side from hon. Members with a certain amount of knowledge of the subject. That in itself should have impressed upon the Financial Secretary why the feeling of the House is against him in taking this awkward stand and refusing to move any further. I sincerely hope that he will now contribute something much more desirable.
Last night the Financial Secretary told us that he had not altogether shut his eyes in the matter of concessions to amateur societies and he promised to look at the matter in the coming year. Will he keep his eyes fixed on the number of small cinemas throughout the country which close down in the next six months and in the light of actual events will he then be prepared to accept our suggestion, even if he will not accept it now, despite the arguments which have been advanced in support of it?

Mr. Shepherd: I do not want to detain the House very long, but there are one or two observations I should like to make on the Amendment. I am very grateful to the Chancellor and the Financial Secretary for what they have done. Since I became a Member of this House in 1945, I have never known a Chancellor who was so willing to help when he could, and we who are interested in this industry ought to express our gratitude for what he has done.
I must say at the same time that I should have been happier if something more could have been done now, because the cinema industry is an industry which has acquired the reputation that every-

body connected with it is abounding in wealth. Some of us who take an interest in it know that it is not so, and it is important that we should try to help the small exhibitor who is having an extremely hard time and who may, with increasing television facilities, have a harder time in the next few years.
6.15 p.m.
My hon. Friend complained about the necessity of having to introduce two Clauses on Report in two successive Budgets, and he seemed to blame the cinema industry for that. But the truth is that both the previous Government and this Government are trying to extract from this industry in taxation more than it can bear, and we have constant troubles because of that essential fact. The demands for tax on this industry are above the level that it ought economically to be called upon to bear.
I welcome the taking away of the rigidity of the tax and the removal of Treasury control in determining the prices of admission. Nothing could be worse, and it is a great discredit to the party opposite that they did not do this a long time ago. I am not at all satisfied that the Treasury understand fully the difficulties of the small exhibitor, and by small exhibitor I mean the person who takes £100 or £120 a week. There are many of them, but I do not accept the figure of the right hon. Gentleman the Member for Greenock (Mr. McNeil) that there are 2,500, though it is quite a substantial number.

Mr. McNeil: I should say in fairness to myself that that was a figure given to the House.

Mr. Shepherd: I do not accept for one moment that there are 2,500 cinemas which are taking about £150 a week gross. If we realise that the big circuits have 1,100 cinemas themselves, it is most unlikely that there are anything like 2,500 of the smaller category, since the total number of cinemas is about 4,700.
Leaving that aside for a moment, let us remember that if a cinema takes £100 or £120 a week, £40 of that has to go in taxes. The cinema owner has to pay about 40 per cent. for film hire, whereas in the old days it was 10 to 20 per cent. He has to pay the wages of his staff, and the wages in these small cinemas are a disgrace to the country. It is perfectly


true to say that these small cinema owners cannot afford to pay the wages they now pay, and many of them work with their wives and families for much less remuneration than they would get in any other form of activity. When my hon. Friend gives further consideration to this problem, I would urge him to look at the particularly hard position of these small cinema owners and to realise that it is a fact that today they all have overdrafts at the bank on which they are paying 5½ per cent. interest. In money that represents quite a substantial burden upon them.
I do not want to detain the House, because we have heard a great deal about the cinema industry, but I assure the House that the small exhibitor in this country is in a serious position. What we have to decide is whether we want him to continue or not. It may be the Government's policy to stop the small exhibitor. Perhaps he is no longer serving a social purpose; but if we decide that the small exhibitor with three changes a week serves a social purpose, we should do something very quickly to preserve his existence, because, if it is not preserved by some relief, then by the time the House discusses the next Finance Bill a great number of them will be out of business.

Mr. Geoffrey Bing: The whole House can congratulate the hon. Member for Cheadle (Mr. Shepherd) for frankly having admitted the shortcomings of the Government which he supports, and for having put before the Chancellor in a phrase or two one of the five products of his careless raising of the Bank rate. Every measure taken by hon. Members opposite has hit the small man. The remarkable thing is that what has been long apparent on this side of the House is becoming apparent to one or two hon. Gentlemen opposite.

Mr. Ross: Very few of them.

Mr. Bing: The argument on this Amendment really proceeds on this line: are we to assume necessarily that the large cinema is -always going to be the right unit? Hon. Gentlemen opposite always hold out against monopoly and say how terrible it is, and yet they always create the social conditions in which monopoly is bound to occur. If financial

advantage is given to the big cinema over the little cinema, which is what the Chancellor is proposing to do, the right hon. Gentleman is not only closing the cinemas in Saffron Walden—they are no doubt out of business already owing to the growing unemployment in that area—but he is taking away from the people the opportunity of going to the cheap seats in the cinemas, owing to their being on short time.
When we consider social policy, we should ask whether it is desirable to have large cinemas or small cinemas. Where do we want to attract people to live? In rural areas? One of my hon. Friends asked earlier what was the use of talking about the value of rural life and how wonderful it was to work on the land, while creating conditions under which people who went there were deprived of amenities.
It is not only the land workers who are involved in the small cinema question. Very few mining areas can support a big cinema. The Chancellor of the Exchequer is penalising not only the farm worker but the miner as well. In fact, he is so directing his tax that it hits the areas where production takes place and favours areas where there is a conglomeration of people, from which, it is said, his other colleagues are trying to persuade people to remove and live elsewhere. I appreciate that the Chancellor feels that the first priority must be money and not culture. Otherwise it would be difficult to see why he saw fit to save £7,000 or £8,000 by closing down parts of some of our most distinguished museums.
He ought not to consider the cinema question quite apart from the aspect of the films shown. If he encourages large cinemas, he discourages the showing of the type of film which is very often shown only in the small cinema. Anyone who takes an interest in the cinema will agree that the cultural sort of film can very seldom be shown in the large cinema, but depends upon the small cinema. The building up of the British cinematograph industry has very often depended upon the disposing to a chain of small independent cinemas of films made quite cheaply.
The Chancellor might consider the matter of newsreels. Large cinemas are in the ring; that might be one of the reasons why the Chancellor encourages


them, because they particularly favoured the presenting of his party's point of view in the recent Election. Such considerations ought not to weigh with the Chancellor of the Exchequer. He ought not to say: "We are indebted to the big cinema and we will therefore give them a quid pro quo," and push the small man out of his job because he would not show the same kind of newsreel.
I have one other point, and I will not detain the House much longer.

Mr. Beverley Baxter: Hear, hear.

Mr. Bing: I am sorry, but the hon. Gentleman is making a mistake if he thinks I am continually speaking. He has entered the House for the first time for two days. When he was last here I was speaking, I know, but I have not been speaking continuously.

Mr. Baxter: The hon. Gentleman is looking sideways across at this Bench, so he must mean myself. I am here all the time. When the hon. Gentleman said he would not detain the House much longer I said, "Hear, hear." I have heard him speak so often that I think it would be a good thing for him to stop.

Mr. Speaker: This is the Report stage of the Finance Bill. I hope that speeches will be kept as relevant to the subject matter as possible.

Mr. Bing: There was an interlude in the discussion when it was doubtful whether I would speak at all, but as you have been good enough to call me I must assert my right so to do. I had almost come to the conclusion of what I was going to say.
If one is to encourage the large instead of the small cinema, what is to be the result in cinema building? Are we to build large cinemas now? I think that the only type of cinema likely to be put up is the small, temporary cinema, for example, in the new towns. Is anyone going to suggest that the new towns will put up cinemas at all? If they do build, it will not be great palaces but small, temporary buildings. That is the only type of cinema likely to be put up in the mining areas in the next 10 years. Possibly hon. Gentlemen opposite will not be in power for so long. Are we to penalise those areas?
I hope that when the Financial Secretary replies, he will deal with the points I have raised. First of all, why should we encourage, and on what basis of principle do we encourage, the large rather than the small cinema? Secondly, how is the Chancellor proposing to encourage British films, if there are not an adequate number of small cinemas where they can be shown? What type of cinema does he envisage is to be built in the new towns in the immediate future? Does he not think that financial encouragement rather than financial discouragement should be given to people who want to put up a small cinema?

Mr. J. Grimond: This is not a very drastic Amendment. Having listened to the speeches in its favour, I think a considerable case has been made out for further concessions on cheap seats both from the point of view of the cinema-goer and the small-cinema owner. What interests me is to know why the cinema is invariably put in a much worse position than other forms of entertainment. I think the Financial Secretary will agree that on the figures that is the case.
It may be that successive Governments have some moral objection to the cinema. If so, it is difficult to argue whether it is morally superior to go to dog racing than to the cinema. There may be some reason connected with a desire to curtail cinema-going so that people will work harder or will go to some other form of entertainment. But it is difficult to argue the matter on those grounds. I strongly suspect that it is simply conservatism, although practised in the past by the Labour Party and in the present by the Conservative Party.
I hope that the Financial Secretary will tell us the reason for this continuance of what I can only think is the conservative principle, if it is a principle at all. I hope he will take note of the very strong arguments which have been advanced to show that the small cinemas are being put in a very difficult position. What was said by the hon. Member for Cheadle (Mr. Shepherd) is absolutely true; if we wait even another year, which may not seem a very long time, throughout that year we shall see more and more small cinemas closing down or being bought up by the big circuits.

Mr. E. Fletcher: My right hon. Friend the Member for Greenock (Mr. McNeil) indicated that we shall be moving an Amendment from this side of the House at a later stage when we come to the Schedule, and that it will be our intention to divide the House. I hope that we shall go further. I hope that when the present Amendment in the name of the Chancellor of the Exchequer is put, we shall divide on that in order to show our displeasure at the complete inadequacy of the proposals which the Government are putting forward with regard to the cheaper seats.
In dividing the House I hope we shall have the support of hon. Gentlemen like the hon. Members for Cheadle (Mr. Shepherd), Orkney and Shetland (Mr. Grimond), and Torquay (Mr. C. Williams), and other hon. Members in all parts of the House, who, with the greatest sincerity and very considerable knowledge of local conditions, have indicated that they also thought the Government's proposals are quite inadequate.
These concessions are not substantial, as the Financial Secretary suggested. They are niggardly and parsimonious. They will not meet the real trouble. There is no doubt that numbers of small cinemas in industrial and rural areas are suffering considerable financial strain. The only way to alleviate the condition of these small cinemas is to make the concession for which the industry has unanimously asked and which has been supported in all quarters of the House, namely, that the 9d. seat should be free of any liability to Entertainments Duty.
6.30 p.m.
That is the short case. It is necessary in order to make it possible for these small cinemas to carry on. Moreover, it would only be in accordance with elementary justice that, just as all other sports and entertainments pay no duty in respect of seats or prices of admission at 9d. or under, the same principle should be applied to the cinema industry. There is no justification in discriminating against it, and there is a positive disadvantage to the industry and also to the Exchequer in doing so.
I want to reiterate what has been said by a number of hon. Members. We have no confidence in the figures given by the Government spokesman as to the amount

which this concession would cost. I believe it would not cost the Exchequer more than £300,000 if all the seats in the 9d. range and under were free from Entertainments Duty. The Financial Secretary has indicated that his Amendment will cost £200,000. We do not accept that. It will not cost more than £150,000 at most. But in any case that is far less than the amount which during the Committee stage debate, he indicated as being a reasonable sum which the Exchequer could afford to give up in order to meet the undoubted hardship which is occasioned. I hope the hon. Member will respond to the appeals that have been made from all parts of the House on this subject.

Mr. H. Wilson: I am sure the House will want to give the hon. Gentleman leave to speak a second time and, before he does so, I want to intervene to appeal to him to go further than he has done. This has been a very good debate, at any rate up to now. [Interruption.] I said that advisedly, Mr. Speaker, because this is the first time I have intervened on films since I was sitting opposite, but I shall not ask for any indulgence on that account.
I think we all feel that up to a point the Government have made a useful proposal in the Amendment on the Order Paper, in that it will give much needed elasticity on certain of the higher-priced seats. I think equally that hon. Members in all parts of the House feel that a great deal more ought to be done, particularly in regard to the cheaper seats. However, I want to remind the House that we are not, and have not been, debating anything fundamental in the Government's proposals before us.
I remember in previous debates on Entertainments Duty and, indeed, in general debates on the film industry, that speakers from the Conservative benches used to say that the high level of Entertainments Duty was the cause of most of the troubles of the film industry. I remember the present Colonial Secretary thundering at us from this very bench about the high level of Entertainments Duty and how it was not only affecting the exhibitors but was ruining the producers.
I remember the hon. Member for Cheadle (Mr. Shepherd) working himself


up into a little passion from time to time on this question, and I would remind him that more is coming out of the industry in Entertainments Duty today than at the time when he used to denounce us for the level of the tax on the cinema industry, and when he used to troop off regularly into the Division Lobby to vote against it.
The Government have not pretended that they are giving any reduction; what they have done is to give some degree of elasticity. We are not debating the film industry as a whole, or even the effect of the Entertainments Duty on the production side of the industry, because the late Government decided that the arguments of hon. Gentlemen opposite were completely wrong. Even a £10 million reduction of Entertainments Duty would only have made a difference of less than £1 million to the producers, and so we devised the Eady scheme for the purpose of helping the film producing side of the industry. All that we have before us this afternoon, therefore, is a proposal which affects the exhibitors and is really a re-distribution of tax as between one exhibitor and another or as between one group of seats and another.
I support the views of my right hon. Friend the Member for Greenock (Mr. McNeil) in emphasising the fact that the Treasury really cannot come to the House and claim that, on the estimates available to them, this, that or the other thing will cost £300,000 or £200,000 or even £2 million. The margin of error in estimating cinema attendances is much greater and I am sure the hon. Gentleman will be the first to agree that there are great difficulties about it.
I am by no means satisfied that even this scheme put up by the Treasury will prove different in terms of revenue from the one put up at quite an early stage by the Cinematograph Exhibitors' Association. The Treasury estimated then that £2 million would be lost, but the Treasury really have no basis for making that estimate. I agree with the view expressed in "The Economist" that on this point it is quite possible, and in fact the balance of opinion must be, that the exhibitors are more likely than the Treasury to be right about the cost involved.

Mr. Boyd-Carpenter: Mr. Boyd-Carpenter indicated dissent.

Mr. Wilson: It is no good the hon. Gentleman shaking his head. He has not been at the Treasury very long and perhaps may not be there very much longer. He must not always come to this House with estimates from the Treasury as though they are the Ark of the Covenant. I would remind him that last year my right hon. Friend, on the basis of Treasury estimates, miscalculated the Budget surplus to the tune of £300 million, so I suggest to the hon. Gentleman that he must not be too nice about an odd £100,000 or £50,000 in the estimates for Entertainments Duty.
We are all sorry that my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) cannot be here today. On the Committee stage he referred to the scheme and paid tribute to Sir Alexander King, to whom I once paid tribute from the Front Bench opposite. I referred to him as an exhibitor who took a broad view of the difficulties of the industry, and not merely of the exhibition side. The estimates associated with his name are more likely to be correct than are those of the Treasury.
We have heard the figures £200,000 and £300,000; my right hon. Friend said £120,000, and the hon. Member for Woodside (Mr. W. G. Bennett) calculated yet a different figure on the basis of the 55 million 9d. seats. It is really quite impossible to get an accurate figure. But I would remind the Government that hon. Members who have spoken from both sides of the House are not pleading the case of the large circuits. That was made clear during the Committee stage, and the Financial Secretary referred to it then. It was made clear by my late hon. Friend the Member for Dundee, East, Mr. Cook, in what proved to be the last speech he made to the House, when he said that we were talking about small cinemas and particularly cinemas in working-class districts.
We are not arguing today for more money for the film producers or for changes which will make any real difference to the cinema-goer. This is a question of the exhibitors. None of us has suggested that the public will be greatly affected by the actual prices charged for admission. We have to think of the position of the small exhibitor in the cinema


where the charges have to be low, and we must recognise that the charges which he is able to make and the degree of tax withdrawn from him affect the service he can give the consumer. Before the war many such cinemas were known as "flea pits "and were generally called the "Lyceum" and such names. There is great danger to that type of cinema if the exhibitor does not get a fair return on his investment.
We have also to remember the wages on the distributive side of the industry. My hon. Friend the Member for Nottingham, North-West recently pointed out the very low level of wages appertaining to certain occupations in the industry. We know that wages in general tend to be determined by the ability to pay of the least favourably placed employer. Therefore, from the point of view of securing workers as well as cinema-goers, something ought to be done for the exhibitors, a large proportion of whose seats cost about 9d. a time.
I am sure this would appeal to the Chancellor if he would take time to think about it for a moment. I want to reinforce the argument that if it can be decided that dog racing, horse racing and other entertainments can be tax-free at 1s., it should be possible for cinemas to be tax free at 9d. The Chancellor should accept our proposals, for they would bring benefit in the case of the cheaper seats at the smaller cinemas. The cost of the odd halfpenny about which we are talking would probably be between £100,000 and £200,000.
I am not satisfied—I hope the Chancellor will look at this in a future year—that he is giving a fair crack of the whip to the 1s. 3d. seats. A degree of prosperity in the cinema trade can be built round the 1s. 3d. seats, and although the Chancellor has done something about it, I am not satisfied, and I doubt whether the exhibitors will be on mature consideration, that he has given them what is required.
After this matter has been decided—I hope the hon. Gentleman will announce that he accepts our argument about the halfpenny—I hope the Chancellor will go into the tax as a whole. A year ago my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) showed that he was willing to consider the whole question of

the future of the duty in relation to the scales and elasticity, and so on. I readily concede that the hon. Gentleman has done something about it. The hon. Gentleman announced that he was willing to set up an inquiry, but that he had to wait for proposals from the exhibitors which were not received until a few weeks ago. I hope that after this debate the Government will agree to set up a full-dress inquiry into the whole question of Entertainments Duty. By all means let them reserve their position in regard to revenue and so on, for one knows the difficulty in another connection which we debated at considerable length a few weeks ago.
The Financial Secretary is aware of the difficulties facing the film trade and the film industry in the future. The Eady plan is due to end in 1954, and, unless announcements are made about its continuance, film production may be very considerably reduced, if it does not come to a full-stop, in the summer of 1953. It is thus important to face up to the future of the Eady plan, and it is equally important to face up to the future of the Entertainments Duty.
We recognise that the Chancellor has done something by removing some rigidities and by increasing elasticity, but we appeal to him to accept the arguments put from both sides of the House about the odd halfpenny. When that is done and when our debate has concluded, I hope he will go on with the proposal initiated by my right hon. Friend the Member for Leeds, South and set up a full-dress expert inquiry into the future organisation of Entertainments Duty. I can assure the right hon. Gentleman that he will find the Opposition ready to cooperate towards the success of such an inquiry.

6.45 p.m.

Mr. Boyd-Carpenter: If I may speak again by leave of the House, I should like to try to reply to some of the points raised in what, to borrow the phraseology of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), has been up till now a good debate. The debate has fallen into two rather unequal parts, one relating to the proposals in the Government Amendments, which, it has been generally accepted, will do a good deal to clear up the anomalies of the existing scale, and the other dealing, very


properly, with the proposals on which hon. and right hon. Gentlemen opposite may or may not, in their own judgment, decide to vote at a later stage of today's proceedings.
I refer for a moment to the first part of the issue, the general proposals for flexibility, only because of the suggestion of the hon. Member for Islington, East (Mr. E. Fletcher), who, I believe, has considerable experience of this industry, that he would like to see his right hon. and hon. Friends vote against them. I should have thought that a very strange thing to do. The proposals are to wipe out what the right hon. Gentleman the Member for Greenock (Mr. McNeil) very generously——

Mr. E. Fletcher: I did not say a single word about flexibility. In my speech I dealt exclusively with the duty on the 9d. seats.

Mr. Boyd-Carpenter: I know. That is perfectly true, but what the hon. Gentleman said was that he would like to see his hon. Friends vote against these Amendments, and yet the Government Amendments are the ones which introduce flexibility. It is no use the hon. Gentleman saying, though it is perfectly true, that in his speech he did not deal with this; what he did was to suggest to his hon. Friends that, without argument from him on the merits, they should nonetheless vote against the proposals.

Mr. Fletcher: I do not want to be misrepresented. What I wanted to make clear—apparently I did not make it clear, but it ought to be made abundantly clear—is that if any of my hon. or right hon. Friends decide to vote against these Amendments it will be for the reason that they regard the proposed concession in the case of the 9d. seats as inadequate, and for no other reason.

Mr. Boyd-Carpenter: They will have ample opportunity, if they desire, to vote on that specific issue on the Amendment of the right hon. Gentleman the Member for Greenock. I thought until the hon. Gentleman rose that we were in general agreement that the flexibility proposals which were to deal with what the right hon. Gentleman the Member for Greenock very properly described as the "hopeless inconsistencies of the present scale"—a scale which, incidentally,

owes its origin to the appropriate Schedule of the Finance Act, 1951—were an excellent and generally approved scale which would enable us to iron out such hopeless anomalies.
The only other aspect of that part of the matter to which I would refer is that to which the right hon. Member for Greenock referred, I think, on the general question of cinema taxation, as quite unjustifiable discrimination. Whatever merits that proposition may have in general, I am bound to remind the right hon. Member that we are, so far as the generality of the matter is concerned, simply maintaining the general level of taxation which his right hon. Friend the Member for Leeds, South (Mr. Gaitskell) found necessary, no doubt for good reasons, to impose last year.
It is really a little hard, when we are seeking within the limits imposed by the present economic situation of the country nonetheless to clear away what everyone admits to be genuine difficulties which face the industry by reason of the arranging of the scales, to be attacked because in present circumstances we cannot adjust the whole burden of taxation in a way which the right hon. Member felt he was quite unable to do when he was in control last year.
I come to the issue which has engaged the attention of the House for most of the debate, the question of the adequacy or otherwise of my right hon. Friend's concession in respect of the 9d. seats. My hon. Friend the Member for Woodside (Mr. W. G. Bennett) laid very proper emphasis on the importance of the 9d. seats. I wholly agree with his general approach to that problem. That, indeed, is the reason why, as my hon. Friend will appreciate, we have concentrated all the relief which my right hon. Friend felt it possible to give on those 9d. seats. This is because his view on the matter and ours so substantially coincide.
The right hon. Member for Greenock and the right hon. Member for Huyton (Mr. H. Wilson) had some discussion as to the figures which were in issue between us. I wholly agree with the right hon. Member for Huyton that any figures on this sort of subject are inevitably figures on which there must be some margin of error. No one would be wise to claim, either for the official figures or for the


figures of industry, that—however honestly both sets may have been compiled—they are completely and wholly accurate, although I can assure the right hon. Member that there is no such margin of error as that to which he referred as having been permitted by his right hon. Friend.
Substantially, we base our figures—I say this in reply to a question which the right hon. Member for Greenock very properly asked—on the attendances during the last six months of last year which were at an annual rate, not, as he stated, of 55 million, but between 60 million and 70 million in respect of the 9d. seats. We based them also, of course, because his Amendment would carry out consequential Amendments, on the 10d. seats, on a similar calculation of 23 million seats at 10d. Therefore, we arrived at that basis. As I said, obviously no one will waste time in disputing the accuracy to two or three thousand pounds, but we arrived at the basis as far as we could that the concession we are offering is of the order of £200,000, and the concession for which the Amendment moved by the right hon. Member for Greenock asks would be of the order of £400,000.
In the course of this debate we have had different figures given. The hon. Member for Islington, East, with great experience of this industry, has been talking in terms of £350,000 and £400,000 and the right hon. Member for Greenock in terms of between £120,000 and £240,000. My own figures are somewhat higher, but I do not think we need consume time in a detailed dispute. As the right hon. Member for Huyton said, probably in the event the result will be somewhere between the various figures given. I have given the basis on which our calculations were based to reassure the right hon. Member for Greenock that they were based on the best information available.
A number of hon. Members, including the hon. and learned Member for Hornchurch (Mr. Bing), seemed to think that the effect and intention of these proposals was to benefit the big cinema as against the small cinema. The precise converse is the case. As I said in moving the Amendment, we have concentrated the whole of the relief we feel able to give, the £200,000 or whatever the precise figure may be, upon the 9d. seats. The

9d. seats, we are advised by the industry—I will give figures in support—are the seats which matter most to the smaller cinema and least to the bigger cinema.
It may interest the House to know how it works out. In respect of each £100 gross takings of the cinema, in the case of a cinema taking less than £125 a week—that is, the smallest—the relief given by this concession will amount to 23s. At the other end of the scale, in the case of the monster cinema taking £1,500 to £2,000 a week, it comes down to 1s. There is a very sharp gradation in the value of the concession beginning with the highest value to the smaller cinemas and ending with a quite small value to the largest cinemas. I hope that will reassure the House that it is neither our intention, nor would it be the result of these proposals, to benefit the large cinema as opposed to the small cinema.
As I said in opening, we are conscious that the smaller cinema, at any rate in some cases, is undergoing substantial difficulties. My right hon. Friend the Member for Torquay (Mr. C. Williams), who, as the House is aware, has taken a very great interest in the subject and paid the greatest attention to the needs of these small cinemas, made a most helpful and constructive speech. I can add what he at any rate already knows, that the implicit invitation I gave in Committee to those small cinemas to submit details of their difficulties has been responded to in some degree. As he knows, we are always prepared to consider, and to continue to consider, the difficulties of these small cinemas in the light of the evidence that is made available to us.
It is in some degree because my right hon. Friend the Chancellor did feel that some case for assisting them has been made out that a concession, which is appreciable in its cost to public funds, is embodied in the Amendment before the House. We really get down to the issue as to the size of the concession. Nobody, apparently, disputes that in giving this relief to the small cinema through the most effective medium for so doing—the tax on the 9d. seat—the Government are acting in a way in which the House would wish them to do in seeking to deal with the difficulties which have been at some length outlined by hon. Members on both sides of the House during the debate.
The right hon. Member for Greenock wants us to go further, but I ask him to


consider this aspect of the matter. This is a time at which any relief from Entertainments Duty has to be weighed against the background of our economic position. Amounts such as we have been discussing, although they may not loom very large against the whole conspectus in financial affairs, are appreciable sums and it is the duty of my right hon. Friend to safeguard the Revenue to the best of his ability.
My right hon. Friend has thought it right on the evidence before him this year to make this appreciable concession. That does indicate that he does appreciate this problem and is evidence—if evidence be needed—that he will continue to watch the problems of these small cinemas with close attention and with a desire to see that the ill consequences which some hon. Members forecast do not come upon them. In those circumstances, I again commend this Amendment to the House as one which will clear up the hopeless inconsistencies—to use the words of the right hon. Member for Greenock—of the

scale and at the same time make a solid contribution to the needs of these small and struggling cinemas.

Mr. McNeil: I fear f must advise my hon. Friends to vote against the Government's Amendment. I am glad that the Financial Secretary finds some consolation in his argument, because he can have found none from the course of this debate. From both sides of the House, above and below the Gangway, we have heard moderate, reasonable speeches designed to persuade the hon. Gentleman that his proposals were inadequate. Because they are inadequate, as my hon. Friend the Member for Islington, East (Mr. E. Fletcher) said, the logical conclusion is obviously at this stage to divide against the Amendment, and I must so advise.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 256; Noes, 229.

Division No. 168.]
AYES
[7.0 p.m.


Aitken, W. T.
Carson, Hon. E.
Gomme-Duncan, Col. A.


Allan, R. A. (Paddington, S.)
Cary, Sir Robert
Gough, C. F. H.


Amery, Julian (Preston, N.)
Channon, H.
Gower, H. R.


Amory, Heathcoat (Tiverton)
Churchill, Rt. Hon. W. S.
Graham, Sir Fergus


Anstruther-Gray, Major W. J
Clarke, Col. Ralph (East Grinstead)
Gridley, Sir Arnold


Arbuthnot, John
Cole, Norman
Grimond, J.


Ashton, H (Chelmsford)
Conant, Maj. R. J. E.
Grimston, Hon. John (St. Albans)


Assheton, Rt. Hon. R. (Blackburn, W.)
Cooper, Sqn. Ldr. Albert
Grimston, Sir Robert (Westbury)


Astor, Hon J. J. (Plymouth, Sutton)
Cooper-Key, E. M.
Harris, Frederic (Croydon, N.)


Astor, Hon. W. W. (Bucks, Wycombe)
Craddock, Beresford (Spelthorne)
Harrison, Col. J. H. (Eye)


Baldock, Lt.-Cmdr. J. M.
Cranborne, Viscount
Harvey, Air Cdre. A. V. (Macclesfield)


Baldwin, A. E.
Crookshank, Capt. Rt Hon. H. F. C.
Harvey, Ian (Harrow, E.)


Banks, Col. C.
Crosthwaite-Eyre, Col. O E.
Harvie-Watt, Sir George


Barber, Anthony
Crouch, R. F.
Hay, John


Barlow, Sir John
Crowder, John E. (Finchley)
Heald, Sir Lionel


Baxter, A. B.
Crowder, Petre (Ruislip—Northwood)
Heath, Edward


Beach, Maj. Hicks
Darling, Sir William (Edinburgh, S)
Henderson, John (Cathcart)


Bell, Philip (Bolton, E.)
Davidson, Viscountess
Higgs, J. M. C.


Bell, Ronald (Bucks, S.)
Deedes, W. F.
Hill, Dr. Charles (Luton)


Bennett, F. M. (Reading, N.)
Digby, S. Wingfield
Hill, Mrs E. (Wythenshawe)


Bennett, Sir Peter (Edgbaston)
Dodds-Parker, A D.
Hinchingbrooke, Viscount


Bennett, Dr. Reginald (Gosport)
Donaldson, Cmdr. C. E. McA
Hirst, Geoffrey


Bevins, J. R. (Toxteth)
Donner, P. W.
Holland-Martin, C. J.


Birch, Nigel
Doughty, C. J. A.
Holmes, Sir Stanley (Harwich)


Bishop, F. P
Drayson, G. B.
Holt, A. F.


Black, C. W.
Dugdale, Maj. Rt. Hn. Sir T.(Richmond)
Hopkinson, Rt. Hon. Henry


Bossom, A. C.
Duncan, Capt. J. A. L.
Hornsby-Smith, Miss M. P.


Bowen, E. R.
Duthie, W. S.
Horobin, I. M.


Boyd-Carpenter, J. A.
Erroll, F. J.
Horsbrugh, Rt. Hon. Florence


Boyle, Sir Edward
Fell, A.
Howard, Greville (St. Ives)


Braine, B. R.
Finlay, Graeme
Hudson, Sir Austin (Lewisham, N.)


Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)
Fisher, Nigel
Hudson, W. R. A. (Hull, N.)


Bromley-Davenport, Lt.-Col. W. H.
Fleetwood-Hesketh, R. F.
Hurd, A. R.


Brooke, Henry (Hampstead)
Fletcher-Cooke, C.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Brooman-White, R. C.
Foster, John
Hyde, Lt.-Col. H. M


Browne, Jack (Govan)
Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Jenkins, Robert (Dulwich)


Buchan-Hepburn, Rt. Hon P. G. T
Fyfe, Rt. Hon. Sir David Maxwell
Jennings, R.


Bullard, D. G.
Gage, C. H.
Johnson, Eric (Blackley)


Bullock, Capt. M.
Galbraith, Cmdr. T. D. (Pollok)
Johnson, Howard (Kemptown)


Bullus, Wing Commander E. E.
Galbraith, T. G. D. (Hillhead)
Jones, A. (Hall Green)


Burden, F. F. A
Garner-Evans, E. H.
Kaberry, D.


Butcher, H. W.
George, Rt. Hon. Maj. G. Lloyd
Keeling, Sir Edward


Butler, Rt. Hon. R. A. (Saffron Walden)
Glyn, Sir Ralph
Kerr, H. W. (Cambridge)


Carr, Robert (Mitcham)
Godber, J. B.
Lambert, Hon. G.




Lambton, Viscount
Noble, Cmdr. A. H P.
Spence, H. R. (Aberdeenshire, W.)


Lancaster, Col. C. G
Nugent, G. R. H.
Stanley, Capt. Hon. Richard


Langford-Holt, J. A.
Oakshott, H. D.
Stevens, G. P.


Law, Rt. Hon. R. K.
Odey, G. W.
Stoddart-Scott, Col. M.


Legge-Bourke, Maj. E A. H
O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Storey, S.


Legh, P. R. (Petersfield)
Ormsby-Gore, Hon. W. D
Strauss, Henry (Norwich, S.)


Linstead, H. N.
Orr, Capt. L. P. S
Summers, G. S.


Llewellyn, D. T.
Osborne, C.
Sutcliffe, H.


Lloyd, Maj. Guy (Renfrew, E.)
Partridge, E.
Taylor, William (Bradford, N.)


Lockwood, Lt.-Col. J. C.
Peaks, Rt. Hon. O
Teeling, W.


Longden, Gilbert (Herts, S.W.)
Peto, Brig, C. H. M
Thomas, P. J. M. (Conway)


Lucas, P. B. (Brentford)
Peyton, J. W. W
Thompson, Kenneth (Walton)


Lucas-Tooth, Sir Hugh
Pickthorn, K. W. M
Thompson, Lt.-Cdr. R. (Croydon, W.)


Lyttelton, Rt. Hon. O.
Pitman, I. J.
Thorneycroft, Rt. Hn. Peter (Monmouth)


McAdden, S. J.
Powell, J. Enoch
Thornton-Kemsley, Col. C. N


Macdonald, Sir Peter (I. of Wight)
Price, Henry (Lewisham, W.)
Tilney, John


Mackeson, Brig. H. R.
Prior-Palmer, Brig. O. L.
Touche, G. C.


McKibbin, A. J.
Profumo, J. D.
Tweedsmuir, Lady


McKie, J. H. (Galloway)
Rayner, Brig. R.
Vane, W. M. F.


Maclean, Fitzroy
Redmayne, M.
Vaughan-Morgan, J. K.


Macleod, Rt. Hon. Iain (Enfield, W.)
Remnant, Hon. P.
Vosper, D. F.


MacLeod, John (Ross and Cromarty)
Renton, D. L. M.
Wade, D. W.


Macmillan, Rt. Hon. Harold (Bromley)
Robson-Brown, W.
Wakefield, Edward (Derbyshire, W.)


Macpherson, Maj. Niall (Dumfries)
Rodgers, John (Sevenoaks)
Wakefield, Sir Wavell (Marylebone)


Maitland, Comdr J. F. W. (Horncastle)
Roper, Sir Harold
Walker-Smith, D. C.


Maitland, Patrick (Lanark)
Ropner, Col. Sir Leonard
Ward, Hon. George (Worcester)


Manningham-Buller, Sir R. E.
Russell, R. S.
Ward, Miss I. (Tynemouth)


Markham, Maj. S. F
Ryder, Capt. R. E. D.
Waterhouse, Capt. Rt. Hon. C.


Marples, A. E.
Salter, Rt. Hon. Sir Arthur
Watkinson, H. A.


Marshall, Douglas (Bodmin)
Sandys, Rt. Hon. D.
Webbe, Sir H. (London &amp; Westminster)


Maudling, R.
Savory, Prof. Sir Douglas
Wellwood, W.


Maydon, Lt.-Cmdr S. L. C.
Schofield, Lt.-Col. W (Rochdale)
White, Baker (Canterbury)


Medlicott, Brig. F.
Scott, R. Donald
Williams, Rt. Hon. Charles (Torquay)


Mellor, Sir John
Shepherd, William
Williams, Gerald (Tonbridge)


Molson, A. H. E.
Simon, J. E. S. (Middlesbrough, W.)
Williams, Sir Herbert (Croydon, E.)


Morrison, John (Salisbury)
Smiles, Lt.-Col. Sir Walter
Williams, R. Dudley (Exeter)


Mott-Radclyffe, C. E.
Smithers, Peter (Winchester)
Wills, G.


Nabarro, G. D. N.
Smithers, Sir Waldron (Orpington)
Wilson, Geoffrey (Truro)


Nicholls, Harmar
Smyth, Brig. J. G. (Norwood)
Wood, Hon. R.


Nicholson, Godfrey (Farnham)
Soames, Capt. C.
York, C.


Nicolson, Nigel (Bournemouth, E.)
Spearman, A. C. M.



Nield, Basil (Chester)
Speir, R. M.
TELLERS FOR THE AYES:




Mr. Drewe and Mr. Studholme.




NOES


Adams, Richard
Coldrick, W.
Hamilton, W. W.


Albu, A. H.
Collick, P. H.
Hannan, W.


Allen, Scholefield (Crewe)
Corbet, Mrs. Freda
Hardy, E. A.


Anderson, Alexander (Motherwell)
Craddock, George (Bradford, S.)
Hargreaves, A.


Anderson, Frank (Whitehaven)
Crossman, R. H. S.
Harrison, J. (Nottingham, E.)


Awbery, S. S.
Cullen, Mrs. A.
Hastings, S.


Ayles, W. H.
Daines, P,
Hayman, F. H.


Bacon, Miss Alice
Dalton, Rt. Hon. H.
Healey, Denis (Leeds, S.E.)


Baird, J.
Darling, George (Hillsborough)
Healy, Cahir (Fermanagh)


Balfour, A.
Davies, A. Edward (Stoke, N.)
Henderson, Rt. Hon. A. (Rowley Regis)


Barnes, Rt. Hon. A. J.
Davies, Harold (Leek)
Herbison, Miss M.


Bartley, P.
Deer, G.
Holman, P.


Bellenger, Rt. Hon. F. J.
Delargy, H. J. L
Houghton, Douglas


Bence, C. R.
Dodds, N. N.
Hoy, J. H.


Benn, Wedgwood
Donnelly, D. L.
Hudson, James (Ealing, N.)


Benson, G.
Dugdale, Rt Hon. John (W. Bromwich)
Hughes, Cledwyn (Anglesey)


Beswick, F.
Ede, Rt. Hon. J. C.
Hughes, Emrys (S. Ayrshire)


Bevan, Rt. Hon. A. (Ebbw Vale)
Edelman, M.
Hynd, H. (Accrington)


Bing, G. H. C.
Edwards, John (Brighouse)
Hynd, J. B. (Attercliffe)


Blackburn, F.
Edwards, Rt. Hon. Ness (Caerphilly)
Irving, W. J. (Wood Green)


Blenkinsop, A.
Evans, Albert (Islington, S.W.)
Isaacs, Rt. Hon. G. A.


Blyton, W. R.
Evans, Edward (Lowestoft)
Janner, B.


Boardman, H.
Evans, Stanley (Wednesbury)
Jay, Rt. Hon. D. P. T.


Bottomley, Rt. Hon. A. G.
Ewart, R.
Jeger, George (Goole)


Bowden, H. W.
Fernyhough, E.
Jeger, Dr. Santo (St. Pancras, S.)


Braddock, Mrs. Elizabeth
Finch, H. J.
Jenkins, R. H. (Stechford)


Brockway, A. F.
Fletcher, Eric (Islington, E.)
Johnson, James (Rugby)


Broughton, Dr. A. D. D.
Follick, M.
Johnston, Douglas (Paisley)


Brown, Rt. Hon. George (Belper)
Fraser, Thomas (Hamilton)
Jones, David (Hartlepool)


Brown, Thomas (Ince)
Freeman, Peter (Newport)
Jones, Frederick Elwyn (West Ham, S.)


Burton, Miss F. E.
Gaitskell, Rt. Hon. H. T. N
Jones, T. W. (Merioneth)


Butler, Herbert (Hackney, S.)
Gibson, C. W.
Keenan, W.


Callaghan, L. J.
Glanville, James
Kenyon, C.


Carmichael, J.
Gordon Walker, Rt. Hon. P. C.
Key, Rt. Hon. C. W


Castle, Mrs. B. A.
Greenwood, Anthony (Rossendale)
King, Dr. H. M.


Chapman, W. D.
Grenfell, Rt. Hon. D. R.
Kinley, J.


Chetwynd, G. R.
Grey, C. F.
Lee, Frederick (Newton)


Clunie, J.
Griffiths, David (Rother Valley)
Lee, Miss Jennie (Cannock)


Cocks, F. S.
Hall, John (Gateshead, W.)
Lever, Leslie (Ardwick)







Lewis, Arthur
Peart, T. F.
Taylor, Rt. Hon. Robert (Morpeth)


Lipion, Lt.-Col. M
Poole, C. C.
Thomas, David (Aberdare)


Logan, D. G.
Popplewall, E
Thomas, George (Cardiff)


MacColl, J. E.
Porter, G.
Thomas, Iorwerth (Rhondda, W.)


McGhee, H. G.
Price, Joseph T. (Westhoughton)
Thomas, Ivor Owen (Wrekin)


McGovern, J.
Price, Philips (Gloucestershire, W.)
Thorneycroft, Harry (Clayton)


McInnes, J.
Proctor, W. T.
Thurtle, Ernest


McKay, John (Wallsend)
Pursey, Cmdr. H
Tomney, F.


McLeavy, F.
Rankin, John
Turner-Samuels, M.


McNeil, Rt. Hon. H.
Reid, Thomas (Swindon)
Ungoed-Thomas, Sir Lynn


MacPherson, Malcolm (Stirling)
Reid, William (Camlachie)
Viant, S. P


Mainwaring, W. H.
Rhodes, H.
Watkins, T E


Mallalieu, J. P. W. (Huddersfield, E.)
Richards, R.
Weitzman, D.


Mann, Mrs. Jean
Roberts, Rt. Hon. A.
Welts, Percy (Faversham)


Manuel, A. C.
Roberts, Albert (Normanton)
Wells, William (Walsall)


Marquand, Rt. Hon H. A.
Roberts, Goronwy (Caernarvonshire)
West, D. G


Messer, F.
Ross, William
Wheatley, Rt. Hon. John


Mitchison, G. R.
Royle, C.
White, Mrs Eirene (E. Flint)


Monslow, W.
Schofield, S. (Barnsley)
Whiteley, Rt. Hon. W.


Moody, A. S.
Shinwell, Rt. Hon. E.
Wigg, George


Morgan, Dr. H. B W.
Short, E. W.
Wilcock, Group Capt. C. A. B.


Morley, R.
Shurmer, P. L. E.
Willey, Frederick (Sunderland, N.)


Morrison, Rt. Hon. H. (Lewisham, S)
Silverman, Julius (Erdington)
Willey, Octavius (Cleveland)


Mort, D. L.
Silverman, Sydney (Nelson)
Williams, David (Neath)


Moyle, A.
Simmons, C. P. (Brierley Hill)
Williams, Rev. Llywelyn (Abertillery)


Mulley, F. W.
Slater, J.
Williams, Ronald (Wigan)


Murray, J. D.
Smith, Ellis (Stoke, S.)
Williams, Rt. Hon. Thomas (Don V'll'y)


Nally, W
Smith, Norman (Nottingham, S)
Williams, W. R. (Droylsden)


Noel-Baker, Rt. Hon. P. J
Sorensen, R. W.
Williams, W. T. (Hammersmith, S.)


Oldfield, W. H.
Soskice, Rt. Hon. Sir Frank
Wilson, Rt. Hon Harold (Huyton)


Oliver, G. H.
Sparks, J. A.
Winterbottom, Ian (Nottingham, C.)


Oswald, T.
Stewart, Michael (Fulham, E.)
Woodburn, Rt. Hon. A.


Padley, W. E.
Stokes, Rt. Hon. R. R.
Wyatt, W. L.


Paling, Rt. Hon. W. (Dearne Valley)
Strachey, Rt. Hon. J.
Yates, V. F.


Paling, Will T. (Dewsbury)
Strauss, Rt. Hon. George (Vauxhall)



Pannell, Charles
Summerskill, Rt. Hon. E.
TELLERS FOR THE NOES:


Pargiter, G. A.
Swingler, S. T.
Mr. Wilkins and


Parker, J.
Sylvester, G. O.
Mr. Kenneth Robinson.


Pearson, A.
Taylor, John (West Lothian)

Further Amendment made: in page 2, line 30, after "shall," insert:
be the scale set out in Part II of the said First Schedule:
Provided that as respects payments for admission to entertainments held before the twenty-seventh day of July, nineteen hundred and fifty-two the third scale shall."—[Mr. Boyd-Carpenter.]

Mr. Speaker: I shall next call the Amendment in the name of the right hon. Member for Leeds, South (Mr. Gaitskell). It occurs to me that the six other Amendments which appear on the same page of the Order Paper cover similar ground, and that it may be possible for the House to discuss them all together with this Amendment. I would also point out that there was, I understand, a long discussion on this matter in Committee and I hope it will not be found necessary to repeat all the arguments here.

Mr. Ellis Smith: I beg to move, in page 2, line 32, after "applicable," to insert:
in the case of any entertainment which consists of games or other sports and.
I certainly shall accept your advice, Mr. Speaker, and I wish that it had been applied retrospectively. I shall accept it

for many reasons. Those present during the Committee stage will agree that what was at stake was very adequately discussed. We gained the sympathy of the Chancellor and I am anxious to retain it. Judging by his demeanour during the last hour or so, he would agree with my attitude towards your advice.
The organised bodies in the world of sport, particularly the Association players' union and the Football League very much appreciate the attention given by the Committee to the questions which were discussed during the Committee stage and I think that that should be placed on record. The undertaking given by the Chancellor to consider the position between Committee stage and Report stage has caused great interest outside. Many meetings have been held, including the annual meeting of the Football League, and the players' union have also given consideration to what was said.
In addition, I have received letters from a number of people, including Stoke City and Manchester United Football Clubs, who also much appreciate what was said. All are looking forward to the Chancellor implementing the undertaking which he gave on the Committee stage.

Mr. J. P. W. Mallalieu: I beg to second the Amendment.
Like my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), I do not propose to repeat any of the arguments advanced on this subject on Committee stage. But I wish to deploy two arguments which, so far as I know, were not put, one peculiar to one game and the other dealing with two games, and to answer a point raised during the Committee stage which has a general application to the Amendment.
The point I want to make relates to Association football and the finances of that game. During the inter-war period the professional game was not profit-making in any sense as I understand it. Though it was expanding rapidly, profits were not made by the clubs because they had to meet the expansion of the popularity of the game by spending large amounts on grounds and stands and the rest. That resulted in nearly all the clubs in the country having very large overdrafts, which were guaranteed by directors who were mainly wealthy sportsmen prepared to spend money on their hobby.
That was the position in the inter-war years. After the war the situation? changed considerably because, rightly, and I am glad it happened, money was very much more widely spread, with the result that people who wanted to watch football were better able to afford to do so. Gate receipts were increased and for several years almost every club, even those in the Third Division, North, were able to pay their way. Many clubs paid off their overdrafts. The Arsenal Football Club, which had been in the hands of the Prudential for some 10 years, was able to clear off something like £100,000 in a very few years.
Now, unhappily, the position has deteriorated. As the Chancellor knows, gate receipts and attendances are falling, and it is less possible for all but the wealthiest and the most patronised clubs to pay their way out of gate receipts.

Mr. Ellis Smith: That does not include Huddersfield.

7.15 p.m.

Mr. Mallalieu: Unfortunately, it does include Huddersfield.
Since the war, rightly again as I think, the number of people who have large sums of money to spare has been sharply

reduced. It is not now anything like so easy to find wealthy sportsmen who will come on to the boards of clubs and back the overdraft at the bank, or put in cash, as families have done for Huddersfield in years past. The result is that clubs are getting into a very precarious situation, and one which is becoming more precarious because of the proposals of the Chancellor.
The increase in the Bank rate is costing clubs a good deal more for overdrafts. Indeed, it is not merely the increased Bank rate, because the fact is that bank managers are cutting down on overdrafts very quickly indeed. The increase in Entertainments Duty is likely to discourage people from attending football matches by making it more costly for them that do so, and, therefore, the revenue which clubs are likely to get in the future is reduced.
If the Chancellor persists in this policy it seems to me that one of two things, or perhaps both of them, are likely to happen. [Interruption.] I listened earlier with great interest to a speech from the hon. Member for Edinburgh, South (Sir W. Darling) on how easy it was for men of enterprise to get money. Unfortunately, that is not so in football. It is now extremely difficult, mainly as a result of the change in credit policy, for football clubs to get any money at all.
One thing which is almost certain to happen in the next few years if this policy is persisted in is that the Third Division will collapse entirely. I do not suppose the Chancellor knows anything about the Third Division. I do not either. It was only a few weeks ago that I found out there was a Second Division. Another thing which is likely to happen is that the transfer system is likely to be extended, because so far as the lower clubs are concerned, the only way in which they will be able to pay their way in the future, with taxation increases and a lack of wealthy directors, is by finding young players and selling them quickly, like cattle. That is a state of affairs which I cannot believe that the Chancellor wishes to perpetuate.
The second point covers Association football and Rugby League football. In recent years the players' unions in these games have been trying hard to improve the wages of the players. At first sight, the wages do not appear to be too bad.


A wage of £14 a week is fair, but it must be remembered that the life of a player is comparatively short. He is certainly past his best at the age of 35, and he is finished altogether at the age of 40. He has a right, therefore, to receive a higher reward for the skill that he displays in his profession than have some people in other professions.
The Association Football Players' Union have found the greatest resistance from the clubs, the League and the Football Association, against their demands for better accommodation and wages. The result has been that the Ministry of Labour ordered an inquiry into the matter. The tribunal reported that in some respects the players were entitled to higher wages. If the higher rate of Entertainments Duty is imposed it will arm the clubs with yet another argument, which will be extremely difficult to refute, for refusing the demands of the players.
Lastly, I refer to a point made during the Committee stage by two hon. Gentlemen opposite, the hon. Member for Edinburgh, South, who is now so lugubrious whenever we suggest improvements, and the hon. Member for Louth (Mr. Osborne). They seemed to suggest that this question was trivial and that, faced as we were with a great crisis, it did not matter; we should not be wasting our time discussing sport.
I suggest that these sports are good in themselves. They provide enjoyment, and any enjoyment of that kind is an absolute good. I do not expect the hon. Member for Edinburgh, South to follow me into these philosophical heights, because he seems to display a utility mind on these occasions.

Sir W. Darling: We are discussing the Finance Bill, and not the Utility scheme.

Mr. Mallalieu: For example, the hon. Gentleman is anxious to see production improved. He cannot believe that production will increase if the people who produce the goods have no entertainment. Surely he does not suggest that if a man in one hour can produce 10 articles then if he works for 10 hours he can produce 100 articles. That does not happen. The man needs rest and, equally, he needs entertainment.
A worker may be required to spend long hours standing behind a shop

counter or over a bench. He needs to be physically fit. This sort of entertainment which it is proposed to tax more heavily is one of the best means of increasing the physical well-being of the people as a whole. [HON. MEMBERS: "Not people watching."] Indeed, yes. That is a most important point. I would argue the importance of professional football and cricket as a means of increasing the physical standards of people as a whole.
Merely to watch these games stimulates people to play them. If I could get the hon. Member for Edinburgh, South to watch Huddersfield Town, he would want to play himself. As an outside left or a full-back he might be useful. As he has not a Socialist background perhaps he would be better at outside left.
These are the considerations that I urge upon the Chancellor once again. In the previous debate he showed that he had an understanding of the importance of the pleasure and enjoyment which comes from these games, and that he appreciated some of the dangers in which these games would be put if he carried on with his proposal. This proposal will make games less attractive to the professional player. It will make the management of games much more difficult for the managers, directors and committees. Finally, it will make the games much more costly for the spectator. I hope that even now the Chancellor will consider reversing his policy.

Sir Wavell Wakefield: The great national sporting bodies were heartened by the manner in which this matter was discussed during the Committee stage and by the sympathetic way in which the Chancellor replied to the debate. The Chancellor undertook to keep a close watch on cricket, and he gave a concession so that that sport will not be affected this year. As there is opportunity for that position to be considered before the next Finance Bill it would seem unnecessary to refer further to that sport now.
The Chancellor also asked for evidence to be submitted by football clubs showing the effect of this change upon them and demonstrating their ability or otherwise to recover the increase from their supporters. Evidence was given by the Rugby Football Union about a number of leading clubs. It showed that in each


of the last two years two-thirds of those clubs lost money. A further increase in the tax will mean that their position will be even more gravely threatened.
An increase in Entertainments Duty will be a prior charge before any profits can be made. It will merely increase the losses of all these clubs. Evidence was given of the inability to increase price everywhere. Information was given about increased subscriptions and increased gate charges. The evidence is that the limit has now been reached.
By way of illustration, I would point out that we saw how the takings of the London Transport Executive fell when prices were put up too high. That is a monopoly and it is necessary for people to use it to earn their daily bread. The promotion of our games is not a necessity in that sense, nor is it a monopoly and the position has now been reached when charges to the public cannot be raised any higher.
One appreciates the Chancellor's difficulty. He told us that he raised about £4 million from entertainments tax of one type or another on sport of all kinds. I appreciate that no great inroad can be made upon that sum, but I suggest that much of the difficulty in which our our national sporting bodies will find themselves would be obviated if the Chancellor would consider relieving those national organisations which play amateur sport. I understand that the total tax taken from amateur bodies is about £200,000 a year. If he can give some relief on that score, it would help a great deal.
7.30 p.m.
I understand that about £60,000 is paid in Entertainment Duties by Wimbledon, between £25,000 and £50,000 is paid by Rugby football, and similar amounts by Amateur Association Football and such organisations as the Amateur Athletic Association, boxing and the like. That may mean very little to the Chancellor, but it means a very great deal to national organisations controlling these sports.
In this connection, I should like to refer to a couple of paragraphs in a letter which was sent to the Chancellor of the Exchequer a few days ago by the Central Council of Physical Recreation. This Council is Government-sponsored,

and includes in its membership some 35 national governing bodies of sports. This Council, in making its representations to the Chancellor, said:
The 100 per cent. increase in the rate now proposed has come as a serious and unexpected blow, and it is feared that it may have far-reaching effects on the development of amateur sport. Many small but important governing bodies rely on the income received from one or two championships or competitive events for their administrative and coaching programme. Very many individual private sports clubs can only meet their heavy expenditure on playing fields or club premises if they can be assured of modest receipts from a few matches to which the public pays for admission.
The letter concluded:
The recognition of the educational contribution of sport which was contained in the 1944 Education Acts has served as a great stimulus to the development of coaching schemes; these in turn depend for their maintenance in no small measure on receipts from events, many of which will be hard hit if the proposed increase in Entertainments Duty becomes effective.
I hope that there may be some differentiation between what I may call commercial sporting activities—racing and the like—and our great national amateur games, which ought to be considered, as this letter has indicated, as being of an educational nature.
To conclude, I suggest to the Chancellor that he should include in the Amendments now under consideration that the word "amateur" in front of both "games" and "sports," and that that would be a great step forward towards meeting many of the difficulties with which our national sporting organisations will have to contend. I know that, in the debate on the Committee stage, the Chancellor said that there was difficulty in defining an amateur. I suggest that he should adopt the Olympic definition of amateur, which would provide a broad basis of definition but would also allow for the different definitions which the national sporting organisations adopt themselves.
It seems to me that, if that definition could be used, all the games played by amateur organisations—Association football, Rugby Union, boxing and the like—would be free from this extra duty, which, otherwise, will bear so heavily upon them and be a severe handicap to their prospects of survival. I hope that the Chancellor may find it possible to


do something on the lines I have indicated to help our great national bodies in the difficulties in which they are likely to find themselves.

Mr. E. A. Hardy: I wish to make a plea on behalf of the Rugby League. We have heard much about the amateur, but I understand that some amateurs receive more than the professionals for playing football. We have also heard about clubs which can afford to pay £35,000 in transfer fees. I am appealing for Rugby League clubs, like Liverpool City, whose average attendance last year was 100 spectators a week. We can take any of the teams, like Rochdale, Oldham, Salford, Belle Vue Rangers, Swinton, Halifax, Batley or Bramley and we find that they have been struggling for years. Now that an extra burden of Entertainments Duty is to be imposed upon them, it will have the effect of a very severe drain on their resources.
To take one case alone, as far as the Salford club is concerned, the receipts last year were £15,606, out of which they had to pay duty amounting to £1,214. Assuming that the attendances for the season 1952–53 are approximately the same, the duty payable on receipts of £15,606 will be £2,817. During the years of depression, many Rugby League clubs, in order to enable their patrons to see the matches, had to impose a condition that they should produce their unemployment cards. We do not want to encourage that kind of thing, although the majority of the clubs which are most affected are in industrial areas like Rochdale, Oldham, and Halifax.
In view of the trade depression which is now taking place, I think we are entitled to ask the Chancellor to take a reasonable view of the situation of these clubs. They cannot pay fabulous sums in transfer fees. Clubs in the Rugby League play a very old game of rugby football which is known to be the finest game of football in the world.

Mr. Ellis Smith: That is a very provocative remark.

Mr. Hardy: I am entitled to express my own opinion, but I do not want to become involved in any arguments with my hon. Friends. In these towns, these clubs have done a great amount of work,

particularly in encouraging schoolboys to play the game, and they have spent a great deal of money on these efforts in the expectation that they would not have to meet the imposition of extra duty.

Mr. Barnett Janner (Leicester, North-West): I should like to say a few words, first regarding the position of cricket, although I understood from the undertaking to inquire into the matter which was given at an earlier stage by the Chancellor that he was likely to act in a reasonable way. I would remind him, however, that in my own city and county the position is very serious, and that very considerable losses are being incurred by the Leicestershire cricket county club.
I now want to turn to another form of sport, and I should inform the House that I act in a professional capacity for some of the people concerned with the sport of boxing. Although in that sense I declare an interest, this interest also gives me the opportunity of informing myself about the difficulties with which that form of sport is confronted.
Since the debate took place on the Committee stage, I know that the British Boxing Board of Control has made an approach to the Chancellor to consider the position in which professional boxing is now placed. I am not saying that I disagree with the appeal which has been made to the Chancellor by those who are anxious that amateur boxing and other sports should not be driven out of existence. I want him to realise that the imposition of this new tax is likely to deal a very serious blow to professional boxing, and that it is highly probable that as a result of it the sport may be damaged to an irretrievable extent.
The British Boxing Board of Control deals with professional boxing and the members and stewards, who are men of very high repute and standing in both their private and professional lives, have examined the position very carefully. They are convinced that if the tax is imposed the tournaments which have hitherto been held, many of which have been run at a considerable loss, will be reduced in number, with the result that our standing in the boxing world, not only in this country but internationally, will be very seriously affected.
They have ascertained that of the 737 licensed professional boxing tournaments


held last year, 184, or 25 per cent. of them, resulted in a financial loss to the promoters. They work on a very fine margin. It has already been pointed out that the life of a professional player, so far as his playing activities are concerned, is a very short one, and I need hardly tell the House that the period of professional activity of a boxer is certainly not very long.
One promoter has stated that five of his last six fights showed a very small profit and that if this tax had been imposed all the tournaments held would have been run at a loss. In the opinion of the promoters, the tax cannot be added to the charge already made to those who attend such tournaments. A questionnaire was sent out to promoters by the British Boxing Board of Control to which they received 50 replies. Thirty of the promoters stated that if this tax is imposed to the extent contemplated they will not be able to carry on. It will paralyse the sport in this country and some 5,000 licence holders will be completely put out of activity. The smaller promoters will be particularly affected.
It is a serious matter, because boxing is followed by a very large section of the community. It is held at a time when men are not usually at work, and if boxing is attacked in this way the younger boxers will not be given the opportunity of rising to the heights so important in the international sphere. [Interruption.] I am not suggesting that they always rise to those heights, but we do not want to make it more difficult than a few of the results have shown. I am sure this tax will have a very damaging effect upon this particular form of sport, and I would ask the Chancellor to consider it in that light.
Last year, some £100,000 was received from this sport by way of taxes, and that money is likely to be lost to the Treasury. I think it would be wrong to impose a tax which would drive this particular sport out of existence, and I hope the Chancellor will reconsider his decision and give boxing an opportunity to continue.

7.45 p.m.

Lieut.-Colonel W. H. Bromley-Davenport: I support the very able speech made by the hon. Member

for Leicester, North-West (Mr. Janner). He has covered all the ground and taken the words right out of my mouth. May I say that the House of Commons is the toughest audience in the world because nobody wants to listen and everybody wants to speak. Therefore, I will set everybody's mind at rest by saying at once that I intend to speak for roughly one and a half minutes.
In brief, what will be the result of these increased taxes on the sport of boxing?

Mr. Ellis Smith: A knock-out.

Lieut.-Colonel Bromley-Davenport: The Chancellor considers that no harm will be done and that boxing shows will continue at their present level. But the British Boxing Board of Control think the very opposite will happen. But the worst feature about this increased tax is that it will hit the medium-sized promotions which, as we all know, are the ones where the future champions are found. Many will close down altogether.
As the hon. Member for Leicester, North-West said, 30 out of 50 promoters have already told the British Boxing Board of Control that if these new taxes are imposed they will shut down next season because they believe that the public simply will not pay increased charges. What is to be the result if the British Boxing Board of Control are right? Many promoters will go out of business altogether, there will be less boxing in this country, the standard of boxing will fall, and the Chancellor will lose revenue. But I fear that my right hon. Friend will have his way and that arguments, however eloquently put forward, will carry us no further.
The Chancellor bears a great responsibility in this matter. I gather that he does not think any harm will be done to boxing if he does not remit this tax. I hope he is right. But if he is wrong, he has been warned by the hon. Member for Leicester, North-West and by me—and will be warned, I believe, by other hon. Members—and also by the British Boxing Board of Control.

Miss Elaine Burton: Like the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport) I too shall be very brief so that everybody who wishes may join in this debate. I was glad that my hon.


Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), whose interest in sport is well known in Huddersfield in particular, stressed, in reply to an intervention from the benches opposite that watching or playing games has a good effect on production. Coming from Coventry, which is a city very much represented in the national effort today, I wish to stress that that is a point about which we feel very strongly.
I think that practically every hon. Member with the possible exception of the hon. Member for Edinburgh, South (Sir W. Darling), who is not now in the Chamber, would agree that watching games is not the prerogative of people who are lazy and do not want to do anything about it. Anybody who has been to a match like a local derby or a "battle of the roses" will agree that the energy shown by the spectators is as vigorous as that displayed on the actual pitch itself.
I believe, and I think the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport) made the same point, that some people do not appreciate that this tax will hit the smaller clubs in any particular game. Our sports are not made up only of clubs whose names are national words. Those of us who have played games know that our potential champions come from the smaller clubs. I should like to emphasize that point very strongly.
It is not my purpose to speak on behalf of any particular game, but in this country we believe that cricket and football are national British pastimes. I do not know whether on Saturday the Chancellor is going to Lords to watch us beat India or going to the A.A.A. championships. But he must know that since the last debate on this subject in this Chamber we have had some very good records put up by British athletes. I do not know whether the Chancellor was lucky enough—I was not—to see the wonderful victory by the winner of the British Marathon race last week. I am sorry if, as I believe, I heard the Chancellor say "Where was that?"

Mr. R. A. Butler: The only hope I have of attending these functions is if I am deprived of my present job.

Mr. Ede: We are doing our best for the right hon. Gentleman.

Miss Burton: I hope that the Chancellor will go to Helsinki for the full fortnight.

Mr. Charles Pannell: I hope that he will go to Helsinki for ever.

Miss Burton: Most of us who are keen on athletics are hoping that at Helsinki the British flag will be hoisted because a British winner of the Marathon will come in four and a half laps or one and a half miles ahead of the next competitor. I ask the Chancellor whether he would not agree that we should do everything in our power this year in particular to train young people as athletes. We have this example before us, and if the Chancellor keeps this tax in being he will deprive promising young people of the opportunity of getting better and better.
We have a Third Division football club in Coventry and I think it is known throughout the country that Third Division clubs have difficulties in making ends meet. But it is not only these clubs that are penalised. I do not know where the Chancellor was born, but he sits for Saffron Walden. I come from Yorkshire and everybody knows that that is quite the best cricketing county in the whole country. [HON. MEMBERS: "No."]. Last year, Yorkshire was certainly one of the most financially successful clubs in the country.
Only two county cricket clubs made a profit and Yorkshire, as one of them, made the very large sum of £660. They only did that after taking Test Match receipts into account and also a refund for ground improvements. Does the Chancellor believe that county cricket clubs will be able to carry on in view of the present tax?

Mr. Butler: Actually, I am not proposing to impose it this summer.

Miss Burton: I am quite aware of that, but the clubs would like to be put out of their misery. Knowing the Chancellor's interest in these things, and in view of the fact that this is Olympic Games year, I hope very much that he will be prepared to withdraw this tax.

Mr. James H. Hoy: I do not want to say very much about cricket. It is a game which does not draw many people in Scotland, and we do not give a great deal of support to games which seek to attract workers from their work


during the week. It is a game, apparently, which takes place south of the Border. I want to confine my remarks to two sports.
There is a great case to be made out against the Chancellor imposing this tax on amateur Rugby football clubs. In Scotland the game is played by amateurs who have a tremendous difficulty in keeping it going. This tax will hit them very severely. Indeed, school clubs not only in Scotland but throughout Britain will feel the effects of this tax. It is pretty nasty of the Chancellor, when he finds relief for those who want to go to Ascot to watch horse racing, to seek to impose a penalty on those who want to play football for sport.
I want to draw the attention of the Chancellor or the Financial Secretary also to Association football. Sometimes a wrong idea is conveyed to the general public by reports of very large transfer fees having been paid by certain clubs for a footballer. One gathers the impression that there is a tremendous amount of money flying about when indeed the opposite is the case. Many of the smaller clubs now find it extremely difficult to keep their heads above water.
In Lanarkshire, where there has been a drift of population away from the county because of industrial developments elsewhere, these clubs are finding it nearly impossible to live. Two of the Second Division clubs have already given notice that if this tax is imposed upon them there will be nothing that they can do but shut up shop. We do not want that to happen.
Football has had a pretty precarious existence, and I remind the Chancellor that not so many years ago some clubs existed by providing cheap admission for the unemployed. In the present economic situation, when money is tending to become tighter and tighter, any further increase in the price of admission will make it impossible for many who would like to go to football matches to do so. In addition to the 3d. the Chancellor is going to impose, the clubs themselves were finding things so difficult that they were already considering increasing prices. I am sorry that the Chancellor is not enjoying the bracing air of North Berwick at the present time, but I hope that when next he goes there we shall

have a better speech than the one he delivered last time or that, at least, he will be able to implement his pledges.
I want to extract a pledge from the right hon. Gentleman now. So difficult were things becoming in the Association football world that clubs had already decided that an increase in admission charges would have to be made before the Chancellor imposed this new tax. Now, in consequence of the Chancellor's decision, instead of the price of admission rising from 1s. 6d. to 1s. 9d., the Association has intimated that there will be a rise of 6d. and not 3d. That is a very considerable rise. I am certain that it will have a very bad effect on the game in Scotland and in many parts of England as well.
I should have liked to say a word or two in reply to some of the scathing remarks made by the hon. Member for Edinburgh, South (Sir W. Darling) during the Committee stage, but I shall not do so in his absence. After all, I console myself with the thought that he was born in England and not in Scotland and that maybe that accounts for the remarks he made. I sincerely appeal to the Chancellor to accept the case I have made on behalf of the clubs, without worrying him with details of which he must be well aware. I appeal to him most sincerely to reconsider this tax and to announce, when he replies to this debate, that he will not make this new imposition at this time.

8.0 p.m.

Mr. Philip Noel-Baker: I want briefly to reinforce the arguments which have been submitted by my hon. Friends and by two hon. Members opposite. I would say to hon. Members opposite that while I agree with much that they say, while the concession to amateur sports would, of course, be welcome, we think the Chancellor ought to drop his lamentable proposal both for professional and amateur sports. If hon. Members opposite will vote as they have spoken, perhaps they can decide the Chancellor's mind for him.
I want to reinforce one illustration already given by hon. Members on both sides of the House. I think it shows that while the case which was put from every quarter in the Committee stage was strong, that case has now become absolutely overwhelming. I speak of


boxing. Let the Chancellor consider the figures which have been given by my hon. Friend the Member for Leicester, North-West (Mr. Janner). The official figures of the British Boxing Board last year indicate that with the tax as it was, 184 promotions out of 737–25 per cent.—failed to pay their way.
The Boxing Board and their delegates from all quarters of the country since the Committee stage have considered how this extra duty could be paid. They are absolutely satisfied that they cannot pass it on to the public, and that is why they give the other figures which were quoted by my hon. Friend, that of the first 50 promoters who answered the questionnaire 30 said that they would not go on at all, 11 said they were in doubt and nine said they would try one more promotion before they made up their minds.
What does that mean? It means that the vast majority of all boxing tournaments will not happen next year. It means that all the smaller tournaments and the medium tournaments, which are the real nursery of boxing, will utterly collapse with disastrous results for boxing, and for the Chancellor, too, because he will not get that £100,000 which came to him a year ago. Nothing can be more certain than that in this matter he is killing the goose that lays the golden eggs.
May I reinforce another argument that has been put to the Chancellor—an argument ad hominem, an argument which I hope will appeal to his better self, the self that we knew in 1944. When he was Minister of Education he recognised in the Act of 1944 the educational contribution which could be made by sport. That was a great stimulus to the development of coaching schemes throughout the country. I am glad to say that I think we have finally abandoned our old hypocrisy about "specialisation" and we now recognise that coaching is essential to the full enjoyment and development of any sport. But coaching schemes depend upon money, money depends on gate receipts, and gate receipts are grievously affected by the Entertainments Duty.
It is because that was true that the Chancellor of the Exchequer in 1946, wanting to carry out the purpose of the Education Act, wanting to make coaching

schemes effective, and wanting to get the full educational contribution that can come from sport, reduced the rate of Entertainments Duty which sport must pay. He did so in the light of a memorandum prepared by the Central Council for Physical Recreation. I have had the privilege of serving on the Council for many years. It includes representatives of 35 governing bodies on sport. It is really the highest authority in the country on this kind of subject.
The Central Council welcomed very warmly the reduction of the duty in 1946. They said that it gave great satisfaction and encouragement to the governing bodies. They said—and I know from personal experience of various sports that it is true—that that concession would lead to a great development of coaching schemes. The Council now say that this 100 per cent. increase that the Chancellor proposes has come as a serious and unexpected blow, that it will have very serious results, that it will paralyse the administrative system and the coaching schemes of these governing bodies, that it hits nearly all the governing bodies and nearly all the individual clubs.
I hope the Chancellor will reflect on what he is doing. In four weeks from now the best team we have ever had will go from here to the Olympic Games. Since the Education Act, 1944, and the tax concession of 1946, and largely because of those enactments, we have had a great all-round advance in Britain in many forms of sport and physical recreation. The advance in numbers taking part, in interest and in performance is an asset of great value—I would say of great moral value—to the nation as a whole. The Chancellor is imperilling—he may be destroying—what has been achieved, and I beg him once more to reconsider and desist from what he proposes.

Mr. R. A. Butler: I think it may be useful if I intervene at this stage. The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), in a model speech both for brevity and clarity, moved this Amendment, and he referred to the undertaking which I gave on the Committee stage.
I then said that I would do my duty by undertaking to review the aspect of the tax in relation to football and other sports in the light of the evidence I could


collect—evidence from clubs as to what the effect would be on their future and evidence of their ability or inability to pass on the tax to their supporters. I undertook to do that before the Report stage. I went on to say that I could give no specific undertaking of a definite concession, but after what I had heard I thought it would have been wrong of me not to undertake to look at this matter again in order to see the effect of what had been suggested. That is the basis of what I am now going to say.
We have had a further very searching inquiry into the effect of what is our policy, namely, that the most logical system, after the lengthy debates on the Finance Bill of last year, would be to group all sports together. The House will remember that last year there was very great pressure on behalf of speedway racing. The whole structure of the tax was thought to be unsatisfactory, and therefore the result of the review, which was undertaken partly under the late Government and partly concluded under our Government, for which I take responsibility, is that all sports should be grouped together logically so that we could have as much fairness as possible, instead of taxing some of them under one scale and some under the other. That is the system which I advocated on the Committee stage, and I will give the House the results of the investigation that I have made as to whether any alteration can or cannot be made in this system.
First, I want to look into the argument of the hon. Member for St. Marylebone (Sir W. Wakefield) in which he referred to the possibility of omitting the amateur clubs. I have, of course, read his Amendment to page 2, line 45. Among other things, he states in that Amendment that an amateur must be
one who participates and always has participated in sport solely for pleasure and for the physical, mental or social benefits he derives therefrom. …
and that an amateur is one who does not expect any
material gain of any kind direct or indirect. …
I have examined whether that definition would work, and whether we could abstract the amateur side of these sports and drop them on to the lowest scale of

all. But I must honestly confess that I find it unworkable.
I find it unworkable to frame an Entertainments Duty upon a situation that might arise if an amateur club played a professional club, in which case we should get into a muddle. I also find that it would be impossible—I have consulted the national authorities—to be absolutely certain whether it would be right or wrong to pay the duty if one member of the team had in the past accepted some reward or honour, in which case he would invalidate this description and he would invalidate the particular contest, in which case the duty would have to be charged.
The result is that, despite a considerable amount of labour, I have been quite unable to discover a definition of an amateur on which it would be possible to work. Therefore, I must say most regretfully that while I shall go on searching during the coming year and shall keep this matter in mind—and one does not know what wonders there may or may not be in the next Budget—I cannot find any description of an amateur which will enable me to differentiate in that way.
Coming to the main issue, which is whether or not we should impose Entertainments Duty on the logical basis that all sports are treated the same, the results of my inquiry are broadly as follows. We have taken extra evidence by contact, in the case of Association Football, with the Football League and the Scottish Football League—which I hope will be a comfort to the hon. Member for Leith (Mr. Hoy)—and they, like all the other bodies, do not like the tax. I should like to say that at the beginning, in case I say anything which may give a wrong impression of the attitude of the members of these bodies. They do not like this tax.
But it is interesting to note that the Football League, in a letter of 10th June, have announced to Football League clubs that they propose to raise the prices from 1s. 6d. to 1s. 9d. unless the Chancellor amends or withdraws the proposed tax increase. It therefore appears that, subject to the decision I shall shortly announce, they have already made up their minds to the inevitable. We have also taken evidence from the Rugby Union—and this is an answer to the point which was raised by my hon. Friend the Member for St. Marylebone.
Here I should like to make the point that most of the arguments which have been raised in this debate have been concerned with the effect of this tax upon the clubs themselves. Very little has been said about the effect on the spectators. Of course, the spectators are not going to like paying an extra 3d., and the person who imposes that tax has to take the consequences. I realise that; but the main argument has been that the clubs are going to suffer. My evidence from the Rugby Union is that only a small proportion of the clubs represented charge more than 1s. for admission, and they are therefore in no way affected by the duty.
That is the answer to the point made by the hon. Member for Coventry, South (Miss Burton). The small clubs will not be affected by this duty to a very alarming extent. The Rugby Union has 1,400 member clubs. A circular was sent round by the Union to an unspecified number of these clubs and it brought 48 replies which, I suppose, is a small sample on which we can work. Of those, 12 were from clubs which took no gate money. Some clubs evidently find it difficult to pay their way and have to resort to voluntary subscriptions, whist drives and so forth in order to raise funds, but it would appear that the Entertainments Duty is not the only factor over the whole range of the clubs in this sphere.
The hon. Member for Salford, East (Mr. Hardy) has raised the question of the Rugby League. We have been in touch with the Rugby League and have had the benefit of advice from their accountants. They say that average attendances have tended to decline. I do not think that is due entirely to the taxation question. From the price structure which they showed us and which I examined—and this is a point which J should like the House to note—it would appear that if the duty is increased in the way suggested, clubs would be left better off by some £40 a match on last season's average gate. This would be about 5 per cent. of the takings at the increased prices and there is nothing to suggest that attendances would decline by a greater proportion than the gain that would be made.
I want to make the point that in fact the clubs are not going to suffer by this increased taxation. Out of a 1s. 6d.

entrance fee they retain 1s. 5d. at present. Out of a 1s. 9d. fee they are going to retain 1s. 5½d. The irony of the position—which was not observed when I spoke previously—is that the effect of this increase in taxation is going to give a douceur to these clubs. Many of the arguments, especially those put by the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu), have been that clubs are going to go down seriously, but I am afraid that my inquiries, which have been of the most detailed character, do not bear out that fact. I think the House should take this argument into account when considering what will be the effect of this duty.
8.15 p.m.
The right hon. Member for Derby, South (Mr. Noel-Baker) referred to the Central Council for Physical Recreation. We received evidence from them on behalf of 38 governing bodies. While it is true that they, again, do not like the tax, I do not believe it will have the dire effects which the right hon. Gentleman suggests, and I certainly do not think that it will have the disastrous effect upon the younger generation which he foresees. If I thought that I should not have gone on with it. We have also had evidence from the Amateur Athletic Association. They are anxious about attendances but I do not think they have yet apprehended that the level of increase will not be more than 2d. or 3d., and I think they can manage that.
We have had evidence with regard to boxing. Here I come to the points which were made by the hon. Member for Leicester, North-West (Mr. Janner) and the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport). They were seen by my hon. Friend the Financial Secretary and they forecast the most dire results for boxing. I cannot quite make out whether it would be more dire in relation to the dearer seats, some of which cost up to five guineas each, or in relation to the cheaper seats, where admission is some 2s. 3d. or 2s. 6d.; but in either case they foresee very dangerous results.
My difficulty is that I do not see how I can differentiate between boxing and some of the other sports to which reference has been made. I will certainly watch the position with regard to boxing, but my evidence is that the position is


not so serious as that which has been put, quite sincerely, by the hon. Member for Leicester, North West and the hon. and gallant Member for Knutsford.

Mr. Janner: I should like to ask the Chancellor what evidence he has received to support what he is now saying. Has he taken into consideration the fact that, in addition to the amount of revenue which will be lost, assuming calculations are correct, there will be the additional rebates to be made for the purpose of taxation in relation to those who have to close down those particular commitments into which they have already entered. I should like to know what evidence the Chancellor has.

Mr. Butler: I have simply taken what evidence I have had, both from the interview which the hon. Gentleman himself attended and from other sources.
There is one generalisation which the House would do well to master at this stage and that is that all the troubles in which our sports find themselves do not depend solely upon taxation considerations. For example, when we were talking about cricket I indicated that some of the lack of attendance at cricket was certainly not due to the Chancellor, but due to having less bright cricket. Similarly, all the troubles in boxing, with all the difficulties of its promotion, are not entirely due to taxation. The same thing applies to the troubles of the Rugby Union, Rugby League and other sports. They are not entirely due to the Chancellor of the Exchequer.
When we were discussing Purchase Tax, one would have thought that the whole question with regard to Lancashire and everything else depended on the Chancellor of the Exchequer and upon taxation. In fact, all these troubles are not solely attributable to taxation. If a trade or a sports is going up or down, it is not necessarily due to the Chancellor of the Exchequer of the day.
Now I want to consider what would be the effect of the right hon. Gentleman's Amendment. He says that any entertainment which consists of games or other sports should be charged at the lowest rates. That is presumably what we shall have to divide upon. My own view is that that would be an impossible Amendment to interpret. Does the right hon.

Gentleman regard horse racing as a sport? If he is not going to bring down the tax on horse racing—and it is ill defined in the Amendment—I calculate the cost at £1½ million to the Exchequer. If he does contemplate bringing down the tax, the cost will be about £2¼ million. In either case, I am unable to accept the Amendment.
Hon. Members will say, "Why can you not put forward some alternative Amendment which tries to divide one sport from another?" We have tried to divide the sports on the following different lines, and we have failed in each case. First, live sports. Then we have to decide which are live and which are not. Surely speedway racing is pretty live—and yet it is suggested by many hon. Members that speedway racing should be taxed at a different rate from football.
Then we took ball games, for example. Are they to be divided? If so, we should have a higher taxation on swimming, boxing and athletics than on water polo, billiards and netball. I do not believe that differentiation will work. I am trying to find some logical basis for the tax. Then we tried sports which are betting and those which are non-betting, but if we do that we have to consider whether we mean off-the-course betting, as in the case of football, where there are football pools, or on-the-course betting, where the betting is susceptible to tax as a separate entity from the sport. In any scheme that we consider we find that it is almost impossible to get a logical division between the sports.
I want to say this most seriously to the House. It would have been very convenient to me and, indeed, to the Government, and would have saved a great deal of Parliamentary time, if I had made some fictitious distinction between these sports. It would have saved Parliamentary trouble if I had taxed some differently from others. But in my opinion, nobody who holds my office and expects to levy taxation on the people can do so unless he has some basis on which to stand and unless he retains the confidence of those unfortunate people who have to pay the tax.
I realise that this may be an unpopular decision, but, as I have said, I could find no method of differentiating between the sports. If I think further, before next year, and particularly if I take the advice


of the right hon. Member for Huyton (Mr. H. Wilson) and look thoroughly through the whole Entertainments Duty, I should not be surprised if I have an idea, but I cannot honestly find any now, either to differentiate in the case of amateurs or to find a way of differentiating between sports as such.
All I have done about cricket is this. Not only cricket but all summer sports were not, so to speak, in time to be taxed owing to the manner in which their tickets had been issued during the summer. We therefore did not impose the tax on them this summer. In my opinion it is essential to go forward with the scheme as we are now and then to consider the future of summer sports and the future of the duty as a whole at the time when we have an opportunity, next year.
Meanwhile, I am afraid that I cannot indicate to the House, in all good conscience, that I have any alternative basis upon which I can stand and upon which the tax can be levied, and I must therefore ask the House to come to a decision.

Mr. Gaitskell: The right hon. Gentleman's speech was most disappointing, not only because of its negative conclusion but also because of the extreme weakness of the arguments which he put forward. I must confess that I did not think that he was at his best. At the end, he said he had no more ideas at the moment. No doubt he is very tired, but that will not help the football clubs and the other organisations for whom we speak.
To say, for example, as an excuse for not doing anything, that the football clubs have already announced that they will put up their prices—in other words, they assume that the Government will retain their majority in the House—is not a serious argument. Nor, if I may say so to him, is it a serious argument to say that all the trouble with sport is not due to taxation. Nobody ever said it was. What we say is that this extra taxation will do serious damage.
In the third place, I must confess that the Chancellor's picture of himself as a bountiful Minister, helping the clubs by encouraging them to put up their prices and so be better off, did not seem to me very convincing. I think that the right hon. Gentleman is more convincing in the role of the harsh parent who has to be

unpopular than in the other role of Father Christmas which he assumed a little earlier.
What are the arguments here? There is no serious financial argument. After having given away about £50 million in the course of these debates, it is impossible for the Chancellor to say he can make no further concession, not even one that costs only £1,500,000, which is what our Amendment would cost.

Mr. R. A. Butler: The right hon. Gentleman has given a figure which should not gain currency. There is no such figure during the course of this financial year. The maximum limit of the reduction on the original Budget figure is £10 million.

Mr. Gaitskell: I do not wish to get into an argument about that at this stage, although I shall certainly attempt to return to it. If I remember rightly, there was £17 million in the Purchase Tax concessions and £24 million in the case of the Excess Profits Levy.

Mr. Butler: That bears out exactly my remarks, because the £17 million was in a full year and the £10 million applies to this year. Again, the differentiation between the increased Profits Tax and the reduced E.P.L. falls on next year.

Mr. Gaitskell: Let us say that £50 million has been given away for next year. If the right hon. Gentleman prefers to say that he cannot give so much away on Entertainments Duty this year but that he will give it next year I am sure that we shall be perfectly happy.

Mr. Butler: The figure of £50 million is a gross exaggeration and does not take into account the adjustments in the Profits Tax.

Mr. Gaitskell: I want to get back to the Entertainments Duty. Let us say that in a full year the concessions are only £40 million or, if the Chancellor prefers it, £30 million. It is still a vast amount, and I am bound to say that in this sphere, with all the consequences which have been expounded so ably by my right hon. and hon. Friends, there is no financial argument which we can take very seriously.
The real argument which the right hon. Gentleman brings forward is the one I might call the demarcation argument.


Here, the right hon. Gentleman was less than frank with the House. In the Committee stage, when we moved an Amendment which reduced the taxation in the case not only of football and other sports but also in the case of racing, to the lowest level, he used as a powerful argument against the Amendment the fact that it was absurd to give away all this money to horse racing, to speedway and to greyhound racing. All the emphasis in his speech was on the fact that it was, no doubt, an excellent thing to help sport but not to help racing.
Now the right hon. Gentleman says that he cannot distinguish between the two. We put down this Amendment precisely because of his speech on the last occasion, and if he likes to change round and say that everything must be taken together, after all, then, of course, we shall be quite happy for him to move a manuscript Amendment bringing the tax down for all of them to the lower level; but I do not think that he is inclined to do that.
Let us look at this demarcation problem. The right hon. Gentleman says he cannot distinguish between one sport and another. What is to be the position of cricket? He told us the tax would not be imposed on cricket this year, but if there is always to be this massing of all sports together and if no distinction is to be drawn, what is to happen next year? Is this a faint hope which is offered to cricket clubs? I see that the hon. Member for Chelmsford (Mr. Ashton) is becoming very interested in this part of the argument. Is it a faint hope which they are offered and nothing more? What position will the Chancellor be in next year? The only conclusion I reached is that he did not expect to be there next year.
Reverting to the hon. Member for Chelmsford, I must say this to the Chancellor of the Exchequer. I know the hon. Gentleman is his Parliamentary Private Secretary and I think he is still a member of the M.C.C. Committee, if not its chairman—I gather he is a member. I may remind both the hon. Member and the Chancellor that the hon. Member was very good at football and hockey, too. He certainly played for Cambridge at both sports and I am not sure that he was not captain of Cambridge in both.
8.30 p.m.
I am disappointed with them both. The hon. Gentleman might at least have stuck to some of his earlier loves, instead of concentrating on cricket alone. Look at the difficult position he will be in next year, if he is still there, and if the Chancellor has to withdraw the concession because he cannot draw any distinction between cricket and other sports.
Suppose we say that sports must be taken together. What reason is there for saying that cricket, football, boxing and all those other sports must pay a higher tax than theatres and music halls? That is the real point, and the Chancellor has not given us any words of defence at all. I do not see how we can hold the position and, year after year, go on insisting that amateur athletics pays a higher tax than the play in the West End, or musical comedy, or anything of that kind.
There really is no argument whatever. The Chancellor might at least have made some attempt at a defence tonight instead of putting up these very specious arguments. In the circumstances, I do not suppose that he will be surprised—he seems already to know—that we shall divide the House on this question. I express the hope that some hon. Members opposite who have spoken with great feeling and passion on this matter will have the courage of their convictions.
It may be that it will bring the Government down; that is not absolutely certain, but it would be a great triumph for sport and for all the things for which the hon. Member for St. Marylebone (Sir W. Wakefield) and other hon. Members stood. We look forward to their assistance. If that fails we shall pursue this fight and, as the hon. Member for Tynemouth (Miss Ward) said last night, the troops will go out into the country and we shall certainly tell the country what the Chancellor has done.

Mr. James MacColl: Mr. James MacColl (Widnes) rose——

Several Hon. Members: Divide.

Mr. MacColl: I only want to put two very short points to the House. The first is to express agreement with the Chancellor. I am sure that he has taken the right decision in not trying to draw an arbitrary line between amateur and professional sport. The arguments that have been put to the Committee show that it could not possibly work. It is


useless to base a definition on the history of people who never at any time participated in sport for money but solely for pleasure. To apply a definition of that sort to every match would be quite a hopeless undertaking, and would cut out the great League fixtures where the professionals always play.
The other point I want to deal with is what the Chancellor said about the effect of his proposals upon the Rugby League. It seems that the Chancellor has never heard of elasticity of demand. He thinks that all we have to do is to increase the admission fee and we shall therefore be better off, because it always pays to have taxes put on. In Lancashire and Yorkshire, where Rugby League football is played, there is an acute industrial situation because of the Chancellor's financial policy, and these clubs will have a very bad time in maintaining their position even without the doubling of taxation on admission fees, as the Chancellor is doing.
I want to make a concluding point about these Rugby League clubs. Many of them are very small. With clubs like the Featherstone Rovers the whole population are concerned, and they take an active pride in the club. It is as communal and social an amenity as you could have. That applies to many of the small clubs. They cannot expand because they have already got most of the local population. The financial reason for doubling the tax on admission in this cruel way seems thoroughly short-sighted and foolish. If the Chancellor is slow in making up his mind as to what can be done to deal with the situation I suggest that he might consider leaving the whole thing untouched until the next Budget.

Mrs. E. M. Braddock: I do not want to hold up the Division, but following the Chancellor's statement about boxing I think there ought to be figures on record, in view of the fact that the Boxing Board of Control are firmly of the opinion that the additional 100 per cent. tax will put out of

commission two-thirds of the present boxing tournaments.

I am not referring to exhibitions by the big promoters, who only promote very occasionally and draw large amounts of money, but to the small promoters running regular boxing contests and giving a great amount of pleasure to people who are fond of boxing. I think these figures ought to be on record, so that if the Chancellor has to look at the position later he will find that accurate details have been given of the income and expenditure of a large percentage of the small promoters.

Halls throughout the country in the small provincial areas generally hold about 1,200. At admissions of between 3s. 6d. and 15s. 6d. the total income from those 1,200 seats is approximately £400. In the first place, the Entertainments Duty will work out at approximately £130. That means that the promoter is left with about £270. He has to expend about £200 of that on a programme that will attract the 1,200 visitors. That leaves him with £70 out of which he has to pay about £25 for the M.C. and the stewards, etc. That leaves him with £45. Then he has promotion fees, Boxing Board of Control and other fees to pay, which make it an impossible proposition to run at a profit.

In view of the fact that the Chancellor is asking the people of this country to work harder, it is wrong to make it possible for the small pleasures they have—is this case boxing—to be closed down; and if they are closed down quite a lot of the taxation which now accrues from boxing through the small boxing groups throughout the country will disappear. I hope, therefore, that he will keep an eye on the situation and, if he finds that they are closing down in any great numbers, further consider the matter.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 244; Noes, 266.

Division No. 169.]
AYES
[8.38 p.m.


Acland, Sir Richard
Bacon, Miss Alice
Benson, G


Adams, Richard
Baird, J.
Beswick, F.


Albu, A. H.
Balfour, A.
Bevan, Rt. Hon. A. (Ebbw Vale)


Allen, Scholefield (Crewe)
Barnes, Rt. Hon. A. J.
Bins, G. H. C.


Anderson, Alexander (Motherwell)
Hartley, P.
Blackburn, F.


Anderson, Frank (Whitehaven)
Bellenger, Rt. Hon. F. J
Blenkinsop, A.


Awbery, S. S.
Bence, C. R.
Blyton, W R


Ayles, W. H.
Benn, Wedgwood
Boardman,(H




Bottomley, Rt. Hon. A. G.
Hughes, Cledwyn (Anglesey)
Price, Joseph T. (Westhoughton)


Bowden, H. W.
Hughes, Emrys (S Ayrshire)
Price, Philips (Gloucestershire, W.)


Braddock, Mrs. Elizabeth
Hughes, Hector (Aberdeen, N.)
Proctor, W. T.


Brockway, A. F.
Hynd, H (Accrington)
Pursey, Cmdr. H.


Brook, Dryden (Halifax)
Hynd, J. B. (Attercliffe)
Rankin, John


Broughton, Dr. A. D. D.
Irvine, A. J. (Edge Hill)
Reid, Thomas (Swindon)


Brown, Rt. Hon. George (Belper)
Irving, W. J. (Wood Green)
Reid, William (Camlachie)


Brown, Thomas (Ince)
Isaacs, Rt. Hon. G. A.
Rhodes, H.


Burton, Miss F. E.
Janner, B.
Richards, R.


Butler, Herbert (Hackney, S.)
Jay, Rt. Hon. D. P. T.
Robens, Rt. Hon. A.


Callaghan, L. J.
Jeger, Dr. Santo (St. Pancras, S.)
Roberts, Albert (Normanton)


Carmichael, J.
Jenkins, R. H. (Stechford)
Roberts, Goronwy (Caernarvonshire)


Castle, Mrs. B. A
Johnson, James (Rugby)
Robinson, Kenneth (St. Pancras, N.)


Champion, A. J.
Johnston, Douglas (Paisley)
Rogers, George (Kensington, N.)


Chapman, W. D.
Jones, David (Hartlepool)
Ross, William


Chetwynd, G. R.
Jones, Frederick Elwyn (West Ham, S.)
Royle, C.


Clunie, J.
Jones, Jack (Rotherham)
Schofield, S. (Barnsley)


Cocks, F. S.
Jones, T. W. (Merioneth)
Shinwell, Rt. Hon. E.


Coldrick, W.
Keenan, W.
Short, E. W.


Collick, P. H.
Kenyon, C.
Shurmer, P. L. E.


Corbet, Mrs. Freda
Key, Rt. Hon. C. W.
Silverman, Julius (Erdington)


Cove, W. G.
King, Dr. H. M.
Simmons, C. J. (Brierley Hill)


Craddock, George (Bradford, S.)
Kinley, J.
Slater, J.


Crossman, R. H. S.
Lee, Frederick (Newton)
Smith, Ellis (Stoke, S.)


Cullen, Mrs A.
Lee, Miss Jennie (Cannock)
Smith, Norman (Nottingham, S.)


Daines, P.
Lever, Leslie (Ardwick)
Snow, J. W.


Dalton, Rt Hon. H.
Lewis, Arthur
Sorensen, R. W.


Darling, George (Hillsborough)
Lindgren, G. S.
Soskice, Rt. Hon. Sir Frank


Davies, A. Edward (Stoke, N.)
Lipton, Lt.-Col. M.
Sparks, J. A.


Deer, G.
Logan, D. G.
Stewart, Michael (Fulham, E.)


Delargy, H. J.
MacColl, J. E.
Strachey, Rt. Hon. J.


Dodds, N. N.
McGhee, H. G.
Strauss, Rt. Hon. George (Vauxhall)


Donnelly, D, L.
McGovern, J.
Summerskill, Rt. Hon. E


Dugdale, Rt. Hon. John (W. Bromwich)
McInnes, J.
Swingler, S. T.


Ede, Rt. Hon. J. C.
McKay, John (Wallsend)
Sylvester, G. O.


Edwards, John (Brighouse)
McLeavy, F.
Taylor, John (West Lothian)


Edwards, Rt. Hon. Ness (Caerphilly)
McNeil, Rt. Hon. H.
Taylor, Rt. Hon. Robert (Morpeth)


Evans, Albert (Islington, S.W.)
MacPherson, Malcolm (Stirling)
Thomas, David (Aberdare)


Evans, Edward (Lowestoft)
Mainwaring, W. H.
Thomas, George (Cardiff)


Evans, Stanley (Wednesbury)
Mallalieu, J. P. W. (Huddersfield, E.)
Thomas, Iorwerth (Rhondda, W.)


Ewart, R.
Mann, Mrs. Jean
Thomas, Ivor Owen (Wrekin)


Fernyhough, E.
Manuel, A. C.
Thorneycroft, Harry (Clayton)


Finch, H. J.
Marquand, Rt. Hon. H. A.
Thurtle, Ernest


Fletcher, Eric (Islington, E.)
Mayhew, C. P.
Tomney, F.


Follick, M
Mellish, R. J
Turner-Samuels, M.


Foot, M. M.
Messer, F.
Ungoed-Thomas, Sir Lynn


Forman, J. C.
Mitchison, G. R.
Viant, S. P.


Fraser, Thomas (Hamilton)
Monslow, W.
Wallace, H. W.


Freeman, John (Watford)
Moody, A S
Watkins, T. E.


Gaitskell, Rt. Hon H. T. N.
Morgan, Dr. H. B. W.
Weitzman, D.


Gibson, C. W.
Morley, R.
Wells, Percy (Faversham)


Glanville, James
Morrison, Rt. Hon. H. (Lewisham, S.)
Wells, William (Walsall)


Gordon Walker, Rt. Hon. P. C.
Mort, D. L.
West, D. G


Greenwood, Anthony (Rossendale)
Moyle, A.
Wheatley, Rt. Hon. John


Grenfell, Rt. Hon. D. R.
Mulley, F. W.
White, Mrs. Eirene (E. Flint)


Grey, C. F.
Murray, J. D.
Whiteley, Rt. Hon. W.


Griffiths, David (Rother Valley)
Nally, W.
Wigg, George


Griffiths, William (Exchange)
Noel-Baker, Rt. Hon. P J
Wilcock, Group Capt. C. A. B.


Hale, Leslie (Oldham, W.)
Oldfield, W. H.
Wilkins, W. A.


Hall, John (Gateshead, W.)
Oliver, G. H.
Willey, Frederick (Sunderland, N.)


Hamilton, W. W.
Orbach, M
Willey, Octavius (Cleveland)


Hannan, W.
Oswald, T
Williams, David (Neath)


Hardy, E. A.
Padley, W. E.
Williams, Rev. Llywelyn (Abertillery)


Hargreaves, A.
Paling, Rt. Hon. W. (Dearne Valley)
Williams, Ronald (Wigan)


Harrison, J. (Nottingham, E.)
Paling, Will T. (Dewsbury)
Williams, Rt. Hn. Thomas (Don V'll'y)


Hastings, S.
Pannell, Charles
Williams, W. R. (Droylsden)


Hayman, F. H.
Pargiter, G. A.
Williams, W T. (Hammersmith, S.)


Healey, Denis (Leeds, S.E.)
Parker, J.
Wilson, Rt. Hon. Harold (Huyton)


Henderson, Rt. Hon. A. (Rowley Regis)
Paton, J.
Winterbottom, Ian (Nottingham, C.)


Herbison, Miss M
Peart, T. F.
Woodburn, Rt. Hon. A.


Holman, P.
Plummer, Sir Leslie
Wyatt, W L.


Houghton, Douglas
Poole, C. C.
Yates, V. F.


Hoy, J. H.
Popplewell, E.



Hudson, James (Ealing, N.)
Porter, G.
TELLERS FOR THE AYES:




Mr. Pearson and Mr. Arthur Allen.




NOES


Aitken, W. T.
Ashton, H. (Chelmsford)
Barber, A. P. L.


Allan, R. A. (Paddington, S.)
Assheton, Rt. Hon. R. (Blackburn, W.)
Barlow, Sir John


Alport, C. J. M.
Astor, Hon. J. J. (Plymouth, Sutton)
Baxter, A B.


Amery, Julian (Preston, N.)
Aster, Hon. W. W. (Bucks, Wycombe)
Beach, Maj. Hicks


Amory, Heathcoat (Tiverton)
Baldock, Lt.-Cmdr. J. M.
Bell, Philip (Bolton, E.)


Anstruther-Gray, Major W. J.
Baldwin, A. E.
Bell, Ronald (Bucks, S.)


Arbuthnot, John
Banks, Col C.
Bennett, F. M. (Reading, N.)







Bennett, Sir Peter (Edgbaston)
Hay, John
Osborne, C.


Bennett, Dr. Reginald (Gosport)
Heald, Sir Lionel
Partridge, E.


Bevins, J. R. (Toxteth)
Heath, Edward
Peake, Rt. Hon. O.


Birch, Nigel
Henderson, John (Cathcart)
Peto, Brig. C. H. M.


Bishop, F. P.
Higgs, J. M. C.
Peyton, J. W. W


Black, C. W.
Hill, Dr Charles (Luton)
Pickthorn, K. W. M


Boothby, R. J. G
Hill, Mrs. E. (Wythenshawe)
Pitman, I. J.


Bossom, A. C.
Hinchingbrooke, Viscount
Powell, J. Enoch


Bowen, E. R.
Hirst, Geoffrey
Price, Henry (Lewisham, W.)


Boyd-Carpenter, J. A.
Holland-Martin, C. J.
Prior-Palmer, Brig. O. L.


Boyle, Sir Edward
Holmes, Sir Stanley (Harwich)
Profumo, J. D.


Brains, B. R.
Holt, A. F.
Raikes, H. V.


Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)
Hope, Lord John
Rayner, Brig. R.


Bromley-Davenport, Lt.-Col. W. H.
Hopkinson, Henry
Redmayne, M.


Brooke, Henry (Hampstead)
Hornsby-Smith, Miss M. P
Remnant, Hon. P.


Brooman-White, R. C.
Horobin, I. M.
Renton, D. L. M.


Browne, Jack (Govan)
Horsbrugh, Rt. Hon. Florence
Roberts, Peter (Heeley)


Buchan-Hepburn, Rt. Hon. P. G. T.
Howard, Greville (St. Ives)
Robson-Brown, W.


Bullard, D. G.
Hudson, Sir Austin (Lewisham, N.)
Rodgers, John (Sevenoaks)


Bullus, Wing Commander E. E.
Hurd, A. R.
Roper, Sir Harold


Burden, F. F. A.
Hutchinson, Sir Geoffrey (Ilford, N.)
Ropner, Col. Sir Leonard


Butcher, H. W.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Russell, R. S.


Butter, Rt. Hon. R. A. (Saffron Walden)
Hyde, Lt.-Col. H. M.
Ryder, Capt. R. E. D.


Carr, Robert (Mitcham)
Jenkins, Robert (Dulwich)
Salter, Rt. Hon. Sir Arthur


Carson, Hon. E.
Jennings, R,
Sandys, Rt. Hon. D.


Cary, Sir Robert
Johnson, Eric (Blackley)
Savory, Prof. Sir Douglas


Channon, H.
Johnson, Howard (Kemptown)
Schofield, Lt.-Col. W. (Rochdale)


Churchill, Rt. Hon. W. S.
Jones, A. (Hall Green)
Scott, R. Donald


Clarke, Col. Ralph (East Grinstead)
Kaberry, D.
Shepherd, William


Cole, Norman
Keeling, Sir Edward
Simon, J. E. S. (Middlesbrough, W.)


Conant, Maj. R. J. E.
Kerr, H. W. (Cambridge)
Smiles, Lt.-Col. Sir Walter


Cooper, Sqn. Ldr. Albert
Lambert, Hon. G.
Smithers, Peter (Winchester)


Cooper-Key, E. M.
Lambton, Viscount
Smithers, Sir Waldron (Orpington)


Craddock, Beresford (Spelthorne)
Lancaster, Col. C. G.
Smyth, Brig. J. G. (Norwood)


Cranborne, Viscount
Langford-Holt, J. A.
Soames, Capt. C.


Crookshank, Capt. Rt. Hon. H. F. C.
Law, Rt. Hon. R K.
Spearman, A. C. M.


Crosthwaite-Eyre, Col. O. E
Legge-Bourke, Maj. E. A. H
Speir, R. M.


Crouch, R. F.
Legh, P. R. (Petersfield)
Spence, H. R. (Aberdeenshire, W.)


Crowder, Sir John (Finchley)
Lindsay, Martin
Spans, Sir Patrick (Kensington, S.)


Crowder, Petre (Ruislip—Northwood)
Linstead, H. N.
Stanley, Capt. Hon. Richard


Darling, Sir William (Edinburgh, S.)
Llewellyn, D. T.
Stevens, G. P.


Davidson, Viscountess
Lloyd, Maj. Guy (Renfrew, E.)
Stoddart-Scott, Col. M.


Deedes, W. F.
Lockwood, Lt.-Col. J. C.
Storey, S.


Digby, S. Withheld
Longden, Gilbert (Herts, S.W.)
Strauss, Henry (Norwich, S.)


Dodds-Parker, A. D
Low, A. R. W.
Studholme, H. G.


Donaldson, Cmdr. C. E. McA.
Lucas, P. B. (Brentford)
Summers, G. S


Donner, P. W.
Lucas-Tooth, Sir Hugh
Sutcliffe, H.


Doughty, C. J. A
Lyttelton, Rt. Hon. O.
Taylor, Charles (Eastbourne)


Drayson, G. B.
McAdden, S. J.
Taylor, William (Bradford, N.)


Drewe, G.
Macdonald, Sir Peter (I. of Wight)
Teeling, W.


Dugdale, Maj. Rt. Hn. Sir T. (Richmond)
Mackeson, Brig. H. R.
Thomas, Rt. Hon. J. P. L. (Hereford)


Duncan, Capt. J. A. L.
McKibbin, A. J.
Thomas, P. J. M. (Conway)


Duthie, W. S.
McKie, J. H. (Galloway)
Thompson, Kenneth (Walton)


Erroll, F. J.
Maclean, Fitzroy
Thorneycroft, Rt. Hn. Peter (Monmouth)


Fell, A.
MacLeod, Rt. Hon. Iain (Enfield, W.)
Thornton-Kemsley, Col. C. N.


Finlay, Graeme
MacLeod, John (Ross and Cromarty)
Tilney, John


Fisher, Nigel
Macmillan, Rt. Hon. Harold (Bromley)
Touche, Sir Gordon


Fleetwood-Hesketh, R. F
Macpherson, Maj. Niall (Dumfries)
Tweedsmuir, Lady


Fletcher-Cooke, C
Maitland, Comdr. J. F. W. (Horncastle)
Vane, W. M. F.


Foster, John
Maitland, Patrick (Lanark)
Vaughan-Morgan, J. K.


Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Mannhigham-Buller, Sir R. E
Wade, D. W.


Fyfe, Rt. Hon. Sir David Maxwell
Markham, Major S. F.
Wakefield, Edward (Derbyshire, W.)


Gage, C. H.
Marples, A. E.
Wakefield, Sir Wavell (Marylebone)


Galbraith, Cmdr. T. D. (Pollok)
Marshall, Sir Sidney (Sutton)
Walker-Smith, D. C.


Galbraith, T. G. D. (Hillhead)
Maudling, R.
Ward, Hon. George (Worcester)


Garner-Evans, E. H.
Maydon, Lt.-Cmdr S. L C
Ward, Miss I. (Tynemouth)


George, Rt. Hon. Maj. G. Lloyd
Medlicott, Brig. F.
Waterhouse, Capt Rt. Hon. C.


Glyn, Sir Ralph
Mellor, Sir John
Watkinson, H. A.


Godber, J. B.
Molson, A. H. E.
Webbe, Sir H. (London &amp; Westminster)


Gomme-Duncan, Col. A
Morrison, John (Salisbury)
Wellwood, W.


Cough, C. F. H.
Mott-Radclyffe, C. E.
White, Baker (Canterbury)


Gower, H. R.
Nabarro, G. D. N.
Williams, Rt. Hon Charles (Torquay)


Graham, Sir Fergus
Nicholls, Harmar
Williams, Gerald (Tonbridge)


Gridley, Sir Arnold
Nicholson, Godfrey (Farnham)
Williams, Sir Herbert (Croydon, E.)


Grimond, J.
Nicolson, Nigel (Bournemouth, E.)
Williams, R. Dudley (Exeter)


Grimston, Hon. John (St. Albans)
Nield, Basil (Chester)
Wills, G.


Grimston, Sir Robert (Westbury)
Noble, Cmdr. A. H. P.
Wilson, Geoffrey (Truro)


Harris, Frederic (Croydon, N.)
Nugent, G. R. H.
Wood, Hon. R.


Harris, Reader (Heston)
Oakshott, H. D.
York, C.


Harrison, Col. J. H. (Eye)
Odey, G, W.



Harvey, Air Cdre A. V. (Macclesfield)
O'Neill, Rt. Hon. Sir H. (Antrim, N.)
TELLERS FOR THE NOES:


Harvey, Ian (Harrow, E.)
Ormsby-Gore, Hon. W. D.
Mr. Vosper and


Harvie-Watt, Sir George
Orr, Capt. L. P. S
Mr. Richard Thompson.

Amendments made: In page 3, line 26, leave out "this section provides," and insert:
the provisions of this section charging duty on the second scale provide.

In line 27, leave out "it," and insert "they."

In line 36, leave out "this section provides," and insert
the provisions of this section charging duty on the second scale provide.

In line 37, leave out "it," and insert"they."—[Mr. Boyd-Carpenter.]

Mr. Boyd-Carpenter: I beg to move, in page 3, line 39, to leave out "thirty-first day of August," and to insert "thirteenth day of September."
This Amendment and the next Amendment are tabled to carry out the undertaking given by the Chancellor during the Committee stage that he would at this stage introduce Amendments to postpone the operative date of the increases in duty on certain games and sports. As my right hon. Friend then explained, the object was to secure that the increases did not take effect prior to the end of the current first-class cricket season.
Apart altogether from the general question of the incidence of the duty upon cricket, there was the fact that in respect of the small number of matches which take place in the early part of September arrangements had already been made for the printing of tickets, and considerable inconvenience would follow if the rate of duty was raised. My hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) raised in this connection the position of the Scarborough Cricket Festival. If the House accepts this Amendment, that Festival will be protected from the effect of the rise in the duty. It will also have the more gratifying consequence of exempting from the increase the Kingston-upon-Thames Cricket Festival in the first week in September.

Amendment agreed to.

Further Amendments made: in page 4, line 30, leave out "thirty-first day of August," and insert:
thirteenth day of September.

In line 39, at end, insert:
(c) notwithstanding anything in the last foregoing paragraph, the repeal of the First Schedule to the Finance Act, 1951, shall not affect duty in respect of entertainments held

before the twenty-seventh day of July, nineteen hundred and fifty-two.—[Mr. Boyd-Carpenter.]

Clause 6.—(VEHICLES (EXCISE).)

Mr. Boyd-Carpenter: I beg to move, in page 7, line 44, after "registration," to insert:
except that in the case of vehicles registered under the Roads Act, 1920, for the first time before the first day of January, nineteen hundred and forty-seven, the rate shall be nine pounds for vhicles not exceeding six horse power, and ten pounds ten shillings for vehicles exceeding six horse power but not exceeding seven horse power.
This Amendment and the Amendment immediately following are tabled to carry out the undertaking which I gave during the Committee stage debate on Clause 6. The House will recall that during that debate I indicated that in the case of the smallest types of car my right hon. Friend had come to the conclusion that the proportionate increase in the rate of duty was at all events proportionately excessive; and that whereas in respect of cars on which the duty amounted to £10 the increase would be 25 per cent.—from £10 to £12 10s., which is the same percentage of increase as will affect all post-1947 cars—in the case of smaller cars, to raise the duty to £12 10s. would be a somewhat disproportionate burden.
My right hon. Friend authorised me to indicate to the Committee that he would table these Amendments, which affect six and seven horse-power cars. They do somewhat better than I was able to indicate. To round the increase down to a reasonable figure, the figures inserted in this Amendment amount, so far as I can calculate, to almost a 20 per cent. increase.

Amendment agreed to.

Further Amendment made: In page 7, line 47, after "vehicles," insert:

(a)vehicles not exceeding 6 horse power, if registered under the Roads Act, 1920, for the first time before the first day of January, nineteen hundred and forty-seven—£9.
(b) vehicles exceeding 6 horse power but not exceeding 7 horse power, if registered as aforesaid—£10 10s.
(c) vehicles not included in the foregoing sub-paragraphs.—[Mr. Boyd-Carpenter.]

Clause 7.—(ABOLITION OF SPECIAL PROVISION FOR UTILITY ARTICLES.)

Mr. Albu: I beg to move, in page 9, line 19, at the end, to insert:
and in no case before the expiry of a period of twelve months from the date of the coming into force of this Act.


The purpose of this Amendment is to give the Government time to reconsider their whole attitude towards Purchase Tax on what is at present tax-free furniture, and also to reconsider their whole attitude towards the present Utility scheme for furniture and the substitution for it of any form of D scheme.
The debate which we had on the Committee stage on this subject was extremely unsatisfactory to my right hon. and hon. Friends and myself, and from the evidence I have had it was extremely unsatisfactory to the trade and the consuming public, not only because of the refusals given to the Amendments we proposed, but also because of the lamentable ignorance displayed by the Financial Secretary in the replies he gave to me on that occasion. It was absolutely clear to those of us who understand the industry and the way in which the Utility scheme had been operating that the Financial Secretary, and I therefore presume his right hon. Friend, had no idea how this trade works or how in fact the Utility scheme has been operating in the trade.
I would refer the House to the speech the Financial Secretary made on 8th May and I will quote the answer he gave at that time:
It may be that some articles which do not now bear tax will in future bear it, but it may equally be that certain articles which now bear tax will be relieved; and that still others which now bear tax will bear it in a less degree. It is beside the point to ask me to justify the imposition of a new tax and heavier burdens on the housewife, when all that we are concerned with at the moment is the adjustment of Purchase Tax from the old system of Utility with, above it, the whole weight of tax, a Utility scheme. …
and then he goes on to refer to the possible substitution of a D scheme.
What is clear from that is that the hon. Gentleman had not understood that a very small amount of furniture had, since the war, borne any tax at all, and that it would be absolutely impossible to introduce any sort of D scheme comparable with that for textiles, where the D goes on the median price range, without bringing a vast amount of furniture within the tax range which has so far been tax-free.
The hon. Gentleman went on, after I had pointed that out to him in an interruption:

I think the hon. Gentleman will find that his 90 per cent. relates to only that part of furniture production to which the Utility specifications apply.
But of course, 90 per cent. of the whole furniture production of the country has been Utility production, subject to the guarantee of quality and tax-free. There is no question of a limited part of the production being tax free. The whole 90 per cent. of the production, a very vast proportion of the production bought by the ordinary consumer in the country, has been tax-free.
I must quote the hon. Gentleman again, because his remarks show the extraordinary ignorance of the Government in the handling of this matter, and why we have this great anxiety, and why this matter must be postponed. He said:
When we are discussing the merits of this matter it is fair to appreciate that while it is true to say … that some articles will bear tax under the D Scheme which do not at present, other articles, and by no means articles of the highest quality, will be relieved of it."—[OFFICIAL REPORT, 8th May, 1952; Vol. 500, c. 612–13.]
We all agree there are one or two articles which at the present time, because of specifications, do not come under the Utility scheme, and therefore have not been exempt from tax. Nobody denies that there are all sorts of anomalies which need rectifying in the present Utility scheme. I remember that the hon. Gentleman referred to some types of chairs made for use at the Festival of Britain which could not be sold in the export market because they could not be made in the home market, and because they could not be brought into the Utility range and sold tax-free.
9.0 p.m.
I do not think that there is any difficulty about rectifying anomalies of that sort. But the number is so small that by no stretch of imagination would it be possible to bring enough of them into the tax-free range to balance the proportion of the production of the industry which could be brought under tax if anything like a D scheme at the median level were introduced.
My hon. Friends and myself have had representations and letters from manufacturers and the trade unions concerned expressing the serious position. There is no question but that the trade as a whole is united in this matter. The Furniture


Development Council, which represents both sides of the industry, in its annual report said,
The Council strongly holds the view that, since furniture provided under the Utility scheme is for the necessities of the home of the lower income groups, such furniture should not be subject to Purchase Tax of any kind.
On the question of utility specification they say:
… a Utility specification on the lines of that existing at present should be maintained.
We fully understand that the Board of Trade are discussing this matter with all sections of the industry. Naturally, if there are anomalies in the existing scheme we want to see them rectified. But it will take time for manufacturers to adjust designs and methods of manufacture, and there is a considerable degree of unemployment already. The furniture industry is suffering, as are other industries, from a slump in the consuming industries. Something like 5 per cent, or 6 per cent. of the workers in the industry are on short time or unemployed. The total number in the industry is about 125,000 or 126,000.
Because of these anxieties we do not think that it is right for the Treasury to take the powers they are taking to introduce such a scheme. There is no question but that at least 12 months would be required to think this matter out and to become familiar with the difficulties I have described. This Amendment would ensure that these would be no possibility of such a scheme being introduced for at least 12 months. I have been assured by the trade that it will take them at least 12 months to work out any alternative scheme of Utility specification or specifications on standards, and so on.
This is a matter of great seriousness to the trade and the consuming public. We all know that in this trade before the war there were too many manufacturers whose products did not come up to a decent standard. But, apart from the question of standards, this is not the time to introduce into the field of Purchase Tax a whole new range of consumer goods, especially the type of goods which are necessary to a young couple setting up home for the first time. It is true that these are consumer goods. They are a form of capital consumer goods for the family.
Apart from the effect on the industry itself, this new proposal will undoubtedly impose great hardship on young married couples, to say nothing of those who, when they get a little older, have from time to time to replace furniture. I should be prepared to withdraw this Amendment if the Financial Secretary could show me how it would be possible to introduce a D scheme with the sort of median level introduced for textiles and other goods without in fact imposing a very much heavier burden on the purchase of furniture. I do not believe that it is possible to do that.
I shall be interested to see whether the Financial Secretary can get out of the difficulties which he got into during the Committee stage when he tried to explain how this scheme would work. He has had time to look into the matter again, and I shall be most interested to hear what he has to say. I see no way in which he can get out of this difficulty. It is a most serious matter to take power to impose such an increase at present. I hope sincerely that my right hon. Friends will press this matter very hard indeed.

Mr. Frederick Lee: I beg to second the Amendment.

Mr. Boyd-Carpenter: The hon. Member for Edmonton (Mr. Albu) was good enough to say that we were in a muddle over this matter. I know that tu quoque is the meanest form of repartee, but the hon. Gentleman said that acceptance of this Amendment would ensure that there was no possibility of a D scheme being adopted during the next 12 months. It would not do anything of the sort. If the House accepts this Amendment, there will be nothing whatever to prevent my right hon. Friend the President of the Board of Trade from preparing a scheme and bringing it into effect.
All this Amendment would do would be, in effect, to keep the old Utility scheme in respect of a limited amount of furniture at present in warehouses. Acceptance of this Amendment would neither accelerate nor postpone the action of my right hon. Friend in the introduction of a D scheme for furniture. It would merely retain the old Utility scheme, with exemptions in respect of a certain amount of existing furniture, and therefore, if the hon. Gentleman says that we are in a state of confusion, I am


bound to say that the same comment may perhaps be made about him.
What I think he was trying to do, without succeeding—and I know the difficulties of drafting without expert help—was to destroy the provisions of the Bill under which a D scheme for furniture could be introduced by Order, and I think the House would wish me to deal with that intention of the hon. Gentleman, as well as with the particular and rather unsuitable vehicle which he has selected for expressing that intention.
We had quite a long debate during the Committee stage on this issue, and I think I can summarise it accurately by saying this. A number of hon. Members opposite were anxious lest the D scheme for furniture should be introduced prematurely and without proper discussion with the trade and proper thought. That, I think, accurately summarises the speeches made on that issue during a fairly prolonged debate.
The Douglas Report treated the case of furniture in some degree differently from the way in which it treated the other commodities with which it dealt. The Report suggested that, before a D scheme for furniture was introduced, arrangements should be made to secure that standards of quality at least as effective as those under the old Utility scheme should be provided. It is largely for that reason that we did not apply the D scheme to furniture in the way that, under this Bill, we have applied it to other articles within the ambit of the Douglas Report.
As I explained to the Committee during that debate, my right hon. Friend the President of the Board of Trade is taking part in discussions with the trade with a view, among other things, to securing that that recommendation of the Douglas Committee is implemented and that proper safeguards of quality are inserted in any D scheme that may result. I gave an assurance at that stage, which I willingly repeat, that there is no intention on the part of my right hon. Friend to rush these discussions through, as the hon. Member for Edmonton appeared to fear, and to put them into effect without proper time for thought. As a result, I cannot tell the House when it will be possible to bring the scheme forward, but I think it is quite another thing to say, as the hon. Member for Edmonton said,

that we should put it out of the picture altogether that it should be introduced within the next 12 months.
May I put forward this consideration? There are few things more damaging to trade in the field of Purchase Tax than prolonged uncertainty. There are few things more discouraging to the buyer than the knowledge that the rate of Purchase Tax is likely to be varied in the near future. In any event the discussions, of course, go on. The hon. Member's intention is to prevent the discussions, when successful, from being put into effect until 12 months from now. I suggest to the House that nothing could be worse for the industry than for it to be known that a new system of Purchase Tax was to be introduced, but that as a result of this restriction it could not be introduced for perhaps some months.
That would be a wholly unsatisfactory state of affairs and, I should have thought, a thoroughly damaging one to all concerned in the industry. As I pointed out on that occasion, the House has not given up its right to consider the scheme when it is complete. Under the provisions of this Bill, though the scheme can be introduced by Order, that Order is subject to the affirmative procedure. The House will have the opportunity of debating and, if it thinks fit, of rejecting the proposals when they are complete. Under the Bill they will have to be presented to the House.
It would obviously be my right hon. Friend's intention to produce as good a scheme as he could, but if hon. Members are right and the scheme does include the defects which the hon. Member for Edmonton fears, then it will be open to the hon. Member, or, indeed, to any other hon. Member, to persuade the House to reject the scheme when the Order is laid. I suggest that that is really a more practical way of dealing with the affairs of this industry than to put the possibility of a D scheme into cold storage for 12 months, as the hon. Member seems to wish.
I have tried to deal with the matter on the lines of the hon. Gentleman's intention rather than on the lines of the strict construction of his Amendment. I do not hesitate to do so because I suggest to the House that compulsory delay of the implementation of that scheme which, if the discussions go with reasonable


speed and smoothness, we hope may be arrived at in some months' time, could not really be in the interest of anybody.
I appreciate that there are hon. Members opposite who regret the passing of at any rate certain parts of the Utility scheme. That is a matter of controversy and of understandable difference between us, but I really do not think we are serving the interests of this industry or of the national economy by saying that in one respect we should deliberately preserve for a further 12 months this particular aspect of the Utility scheme even though everybody knows that at the end of those 12 months it is coming to an end. Therefore, I hope the hon. Gentleman will not desire to press the matter further.

Mr. Albu: Before the hon. Gentleman sits down, would he deal with the point about the median level? Is it the Government's intention to introduce a scheme which will impose the tax on a much larger proportion of furniture than at the present time?

Mr. Boyd-Carpenter: The House must judge the scheme as a whole when it sees it. All I can say at this stage is that I have little doubt that my right hon. Friend will try to follow the general proposals of the Douglas Committee and to select the median point. The exact effect of that is something to which, I suggest, this House should give proper consideration when the scheme is in detail before it and when hon. Members can calculate the precise effects of it both from the hon. Gentleman's point of view regarding the imposition of tax where it is not imposed at present and also on the general merits of the scheme.

Mr. H. Rhodes: Is it the intention of the Government to introduce such a scheme as soon as the report has been received?

9.15 p.m.

Mr. Boyd-Carpenter: I am not sure what the hon. Member means. It is not a question of a report, but of discussions which are taking place. My right hon. Friend the President of the Board of Trade is informing his mind by discussions with, among others, the industries concerned. When those discussions are terminated, it will then be

for my right hon. Friend and the Government to consider the facts which have arisen in those discussions and to provide a scheme.

Mr. Frederick Messer: I thought that when this Amendment was moved one or two points were put to the Government which were important and which do not appear to have been answered. If, when the Chancellor first introduced the Budget he had any idea of introducing a D scheme for furniture he must have understood the principle upon which a scheme of that kind must be operated. If one has read the Douglas Report or has had any experience at all of the industry one realises that there is no comparison between furniture and textiles. I would say that it is quite impossible for agreement to be reached between the trade and the Government on the establishment of a D scheme.
The Utility scheme is understood, but how is that to apply to furniture, with the exception of a very small percentage of ornamental furniture which is made? What will come within the range of a D scheme? Will it be a utility type of furniture in the sense that kitchen furniture is Utility? Will it be furniture of a special quality? Will it be decided that D furniture will include a proportion of hardwoods and of plywoods and is made in accordance with special styles?
I am sure, from my conversations with them, that representatives of the furniture industry have already made up their minds that if a D scheme is imposed it will not be possible for them to strike a line below which one can call that furniture the kind of furniture that should be tax free and above which tax should be paid. This is important, because at the moment unemployment in the furniture trade is growing to an extent which those in the trade consider to be serious and which if it is continued unchecked, will become alarming. This is an aspect of the matter which cannot be ignored.
I agree with the Financial Secretary that there is nothing worse than indecision and doubt for creating a situation which will lead to greater unemployment. Employers will not indulge in building up stocks if there is any doubt as to how those stocks are to be released and under what conditions they are to be sold. One


can understand that. It would have been far better if this Amendment had been adopted, and if necessary redrafted, and a certain time allowed to elapse so that the trade should know within a certain period just what range of furniture they could go on manufacturing.
Now, until the conversations are concluded, manufacturers will manufacture as little as possible. They will want to know just what sort of D scheme is to be imposed. I suggest that it will be impossible to operate a D scheme, because the trade will find it very difficult to create the type of machinery that will enable furniture to be recognised as above or below the D level. For those reasons it would have been very much better if the Government had agreed to let us have a period of 12 months within which we could explore the whole field so that within that 12 months manufacturers, then secure in the knowledge that they would be free from the fluctuations which otherwise would arise, would be able to continue manufacturing and keeping their men employed.
In my constituency there is one of the biggest furniture manufacturers in the country; but I am not speaking merely because of that. I have an interest in the furniture trade because in my more honourable days I earned my living in that trade, and I can see that there will be the possibility of increasing unemployment because of the doubt about what sort of scheme will finally be introduced. For these reasons I suggest that the Government might consider whether or not they can put a limit to the period within which the exploration shall take place and allow manufacturers to understand just what their position would be up to a certain period of time.
I suggest that the Parliamentary Secretary has not dealt constructively with the position and that the House ought to have a little more information which will give us some sense of security, for at the moment the manufacturing employers and the trade unions themselves are very anxious about their future.

Mr. Jay: I think the Financial Secretary really underestimates the case against extending the D scheme to furniture at all. I wish that he would even now forsake his brief and look at this whole matter with an open mind. He said that on the Committee stage and today we

have argued in favour of a postponement of the introduction of this scheme. That rather underestimates, if it does not misrepresent, our argument.
Our argument has always been that no case has really been made out at any stage for introducing the D scheme and extending the Purchase Tax in the furniture industry at all. The Government seem to have rather a light-hearted attitude to this matter, and they do not appear to understand that opinion in the furniture industry on both sides is overwhelmingly against the whole scheme.
What is the case for having a D scheme here or in textiles or in any other industry? The main case as made by the Douglas Committee is that the present differential between imported and home produced goods is contrary to our international obligations under the Geneva Agreement, and so forth. That is the main substance of the case, and it is, indeed, the case made by the Chancellor. The Douglas Committee made it perfectly clear that that argument will not apply at all to the furniture industry. Therefore, the main argument is completely irrelevant.
In addition to this, the Douglas Committee also made clear that the Utility scheme is perfectly workable and has great value as a guarantee of quality in this industry. The Financial Secretary rather implied that the Douglas Committee recommended that there should be a D scheme for furniture. Of course, it did nothing of the kind. It mentioned certain anomalies in the existing Utility scheme, but at no point did it recommend that there should be a D scheme introduced into the furniture industry. Indeed, on an impartial reading of the Douglas Report one would conclude that the members of the Committee did not really contemplate that this scheme would be introduced at all.
The Financial Secretary seemed to argue—and this threw a curious light on the Government's mind—that there would be something awkward or anomalous about having a D scheme in the textile industries and continuing the old Utility scheme in the furniture industry. But a moment's thought will show that there is absolutely no substance in that. After all, the D scheme will not be introduced over a very large number of goods, such as wireless sets, motor cars


and all sorts of other things which are subject to Purchase Tax. It is quite possible not merely to postpone but to refrain from introducing the D scheme conception into this industry.
In addition to all that it means—and I note that the Financial Secretary did not deny this tonight—extending Purchase Tax, which now applies to only about 10 per cent. of the total output of furniture, to a very much wider proportion of the products of the industry. If it is the intention of the Government to introduce this median it would mean extending it to something like 50 per cent. of the output.
I would remind the Financial Secretary that, although he implied it tonight, the Douglas Committee did not recommend that this median principle should be applied even in the textile industry. That is a decision of the Government and was one which the Douglas Committee came nowhere near recommending in the case of the furniture trade.
Therefore, it seems that there is no case for making any major alteration. In addition to that, it has become apparent, since the Committee stage—as my hon. Friends who represent constituencies where the furniture industry is situated would agree—that there is a very severe depression in the furniture industry at present, and this extension of the tax is calculated to intensify that depression.
One of my hon. Friends quoted the Furniture Development Council. I have here a letter from an executive of a furniture firm referring to speeches made on the Committee stage of this Bill. That letter says:
In company with our representatives I have recently concluded a tour of the furniture retailers in the Midlands, Lancashire, South Wales, South Coast and London and, taking into account reports from representatives in the rest of the British Isles, I am painfully aware of the fact that trade is desperately bad, due in the main to the prevailing shortage of money amongst consumers because of the rising cost of living.
There is not the slightest shadow of doubt that the introduction of the D … scheme which has as its basis the introduction of a level above which Purchase Tax is chargeable will render trade even more impossible than it is at the moment and eventually contribute to unemployment in this industry, at present employing some 125,000 persons.
Throughout the country the public and retailers are insisting that prices come down,

and this is certainly not the time to contemplate legislation which will have the reverse effect and might add up to £10 to the selling price of, say, a bedroom suite which hitherto has borne no tax at all.
That is what the Government are doing. Without any shadow of a case being made out they are applying a high tax to a large range of furniture products at a time when, admittedly, on the evidence of all those in the industry, there is a severe and intensifying depression and unemployment. The Financial Secretary has advanced no reason for doing this except certain rather tendentious—not intentionally tendentious, I am sure, but certainly tendentious—references to the report of the Douglas Committee.
The only other argument which was advanced by the Financial Secretary was that uncertainty would be harmful to the industry. I should like to tell him what my correspondent says about that argument. He says that it would be possible to remove uncertainty
if an announcement were made that the scheme would not be put into effect on furniture.
I think that the Financial Secretary would agree that that argument works equally well either way. One has to decide the main issue of policy on the merits of the case.
9.30 p.m.
I hope, therefore, that the Financial Secretary will be prepared to think about this again, and perhaps give me this assurance tonight. I cannot see why the Government should wish to force this scheme upon an industry which is entirely opposed to it. Quite apart from the increased burden on the consumer, what conceivable reason can there be for doing that? Would he be prepared at least to give us this assurance, that even though these consultations take place, the Government will not force a scheme of this kind upon the furniture industry and will not introduce an order into the House unless they have the agreement of the industry, for instance, through the development council, which, after all, is a public body set up by the Government to speak for the industry and which represents both sides of it?

Mr. Joseph T. Price: May I ask the Financial Secretary a question before the debate winds up? He is overlooking the fact that already a large


element in the manufacture of certain types of furniture consists of textiles. Surely before any global D line for a new tax is placed on manufactured furniture, the furniture, or at least upholstered articles, will already be attracting tax on the textiles above the D line.
If and when the Financial Secretary brings forward the report to which he has referred, I hope he will bear in mind that if a new tax is placed upon furniture, and furniture is subject to the D line, it may well be that double taxation will take place because of the tax already levied upon the textile content of upholstered furniture. This would be a double burden upon an industry already seriously harassed and uttering cries of despair about present prospects.

Mr. William Ross: I sincerely hope that we shall have another word or two from the Financial Secretary, because this situation is alarming. Here we have the position in which the Government, by interfering with reasonable Utility schemes, have already raised the price of textiles at a time when it was the last thing they should have done. They are raising the cost of living all round, and, not satisfied with that, they are determined to raise the cost of furniture, too.
All the Financial Secretary has told us is that later there will be a scheme. True, consultations are taking place, but he has been asked by my right hon. Friend the Member for Battersea, North (Mr. Jay) whether or not he will abide by an agreement within the trade before it is introduced. He has told us tonight that there will be a scheme, but he does not know what it will be like. Some of my hon. Friends think it will be impossible to introduce any scheme, but after what we have seen I think they underestimate the chaos-creating powers of the President of the Board of Trade and the Government.
I sincerely hope that we shall have a reply to this specific question. If this consultation with the furniture industry shows that the two sides of the industry are opposed to the introduction of any such scheme, will the Government drop any idea of rushing one through? Can we have a straight answer to that question?

Mr. Boyd-Carpenter: If I may have the leave of the House to reply, the hon. Member for Kilmarnock (Mr. Ross) can have the straight answer to his question The question which the right hon. Member for Battersea, North (Mr. Jay) and the hon. Member for Kilmarnock asked me was this: whether, in the event of the consultations at present taking place resulting in the view of the industry being against a D scheme, would I give an undertaking that, as a result, there would be no D scheme? The right hon. Member for Battersea, North knows perfectly well that that is not an undertaking which any responsible Government could give.

Mr. Jay: Without prejudice to the benches behind me, may I point out that what I said was an undertaking that such a scheme would not be introduced unless the agreement of the Furniture Development Council was obtained. If the Government think this scheme is desirable in the public interest, they presumably believe that the industry will therefore be willing to accept it.

Mr. Boyd-Carpenter: The right hon. Gentleman cannot get out of it like that. He has asked that the industry should be given a veto on the introduction of a scheme, but that would be a most improper undertaking for me to give, even if I were willing to give it. The views of both sides of the industry are material factors, and my right hon. Friend the President of the Board of Trade is taking many steps to inform himself of them. It is a very different thing from consulting outside interests, as all Governments do in matters of this sort, to coming to the House and saying that a decision by the outside interests shall be binding upon the Government of the day. That is what the right hon. Gentleman has asked me to do and I cannot do so, and have no intention of doing it.
The ultimate decision in this matter is not for the industry, is not even for the Government; it is for this House. Under the procedure, if the Government decide to come forward with a scheme it will be in the form of a Treasury Order and will be subjected to the affirmative Resolution procedure.
One or two other points have arisen in the course of the debate and I will deal with them, since it would seem discourteous not to do so. The hon. Member for Westhoughton (Mr. J. T. Price)


raised an interesting point, but I think I can reassure him. The general practice has been that the textile content of furniture passes to the furniture manufacturing industry before it gets to the point at which it is subjected to Purchase Tax. It does not go to the point at which it would incur tax as a textile. If the hon. Gentleman has any exceptional cases which he knows of and will direct my attention to them I will look at them. In general, it goes as a raw material, and will only bear tax as a finished article or furniture.

Mr. J. T. Price: Do canvases and articles of that sort used in garden furniture undergo the same process?

Mr. Boyd-Carpenter: I must have notice of that question. I should not like to attempt to give an answer straight away. I will communicate with the hon. Gentleman on the point.
The hon. Member for Tottenham (Mr. Messer) also raised an important point about the industry having a little time to adjust designs. That is an important point which must spring from the hon. Gentleman's close personal acquaintance with the problems of this industry. It is a factor which the President of the Board of Trade will bear in mind and which will, no doubt, affect him, if he brings forward the scheme, in the selection of the operative date. I would not like to leave the hon. Gentleman under the impression that we shall not have in mind this important consideration.
The right hon. Member for Battersea, North was perfectly frank in his support

of this Amendment. He does not want a D scheme for furniture at all. That is a point of view legitimately held. It is a matter of opinion and of discussion between us, but it is not a point raised directly, or intended to be raised, on this Amendment, which proceeds on the assumption that there will be a D scheme for furniture and that the decision of the Committee stands. It seeks merely to postpone the decision.

That seems to get the worst of both worlds. To fix a period for the adjustment of designs, such as the hon. Member for Tottenham referred to, is one thing, and is obviously not unimportant, but a blank 12 months during which nothing would be done even though decisions have been reached is a totally different matter. I am certain that hon. Members on both sides will want the industry to prosper; would not wish it to fall between two stools like this.

If hon. Members opposite had been responsible for an Amendment in Committee to delete the relevant portion of the Clause embodying the scheme, the issue would have been clear cut, though it would have been unsatisfactory. But surely, once it is accepted that there must be a D scheme for furniture, as the House in Committee accepted, it is wrong and short-sighted to impose this close season of 12 months.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 244; Noes, 264.

Division No. 170.]
AYES
[9.40 p.m.


Acland, Sir Richard
Bottomley, Rt. Hon. A. G.
Cullen, Mrs. A


Adams, Richard
Bowden, H. W.
Daines, P


Albu, A. H.
Braddock, Mrs. Elizabeth
Dalton, Rt. Hon. H


Allen, Arthur (Bosworth)
Brockway, A. F.
Darling, George (Hillsborough)


Alien, Scholefield (Crewe)
Brook, Dryden (Halifax)
Davies, A. Edward (Stoke, N.)


Anderson, Alexander (Motherwell)
Broughton, Dr. A. D. D.
Davies, Harold (Leek)


Anderson, Frank (Whitehaven)
Brown, Rt. Hon. George (Belper)
Deer, G.


Awbery, S. S.
Brown, Thomas (Ince)
Delargy, H. J.


Bacon, Miss Alice
Burton, Miss F. E.
Dodds, N. N


Baird, J.
Butler, Herbert (Hackney, S.)
Donnelly, D. L.


Balfour, A.
Callaghan, L. J.
Dugdale, Rt. Hon. John (W Bromwich)


Barnes, Rt. Hon. A J
Carmichael, J.
Ede, Rt Hon. J. C.


Bartley, P.
Castle, Mrs. B. A.
Edwards, John (Brighouse)


Bellenger, Rt. Hon. F. J
Champion, A. J.
Edwards, Rt Hon. Ness (Caerphilly)


Bence, C. R.
Chapman, W. D.
Evans, Albert (Islington, S.W)


Benn, Wedgwood
Chetwynd, G. R.
Evans, Edward (Lowestoft)


Benson, G.
Clunie, J.
Evans, Stanley (Wednesbury)


Beswick, F.
Cocks, F. S
Ewart, R.


Bevan, Rt. Hon. A. (Ebbw Vale)
Coldrick, W.
Fernyhough, E.


Bing, G. H. C.
Collick, P. H.
Finch, H. J.


Blackburn, F.
Corbet, Mrs. Freda
Fletcher, Eric (Islington, E.)


Blenkinsop, A.
Cove, W. G.
Follick, M.


Blyton, W. R.
Craddock, George (Bradford, S.)
Foot, M. M.


Boardman, H.
Crossman, R H. S.
Forman, J. C




Fraser, Thomas (Hamilton)
MacColl, J. E.
Shinwell, Rt. Hon. E


Freeman, John (Watford)
McGhee, H G.
Short, E. W.


Freeman, Peter (Newport)
McGovern, J
Shurmer, P. L. E.


Gaitskell, Rt. Hon H. T. N.
McInnes, J.
Silverman, Julius (Erdington)


Gibson, C. W.
McKay, John (Wallsend)
Silverman, Sydney (Nelson)


Glanville, James
McLeavy, F
Simmons, C. J. (Brierley Hill)


Gordon Walker, Rt. Hon. P. C.
MacPherson, Malcolm (Stirling)
Slater, J.


Greenwood, Anthony (Rossendale)
Mainwaring, W. H.
Smith, Ellis (Stoke, S.)


Grenfell, Rt Hon D R
Mallalieu, J. P. W (Huddersfield, E.)
Smith, Norman (Nottingham, S.)


Grey, C. F.
Mann, Mrs. Jean
Snow, J. W.


Griffiths, David (Rother Valley)
Manuel, A. C.
Sorensen, R. W.


Griffiths, William (Exchange)
Marquand, Rt. Hon. H. A.
Soskice, Rt. Hon. Sir Frank


Hale, Leslie (Oldham, W.)
Mayhew, C. P.
Sparks, J. A.


Hall, Rt. Hon. Glenvil (Colne Valley)
Mellish, R. J.
Stewart, Michael (Fulham, E.)


Hall, John (Gateshead, W.)
Messer, F.
Stokes, Rt. Hon. R. R


Hamilton, W. W
Mitchison, G. R.
Strachey, Rt. Hon J


Hannan, W
Monslow, W.
Strauss, Rt. Hon George (Vauxhall)


Hardy, E. A.
Moody, A. S.
Summerskill, Rt. Hon. E


Hargreaves, A.
Morgan, Dr. H. B. W
Swingler, S. T.


Harrison, J. (Nottingham, E.)
Morley, R.
Sylvester, G. O


Hastings, S.
Morrison, Rt. Hon. H (Lewisham, S.)
Taylor, John (West Lothian)


Hayman, F. H.
Mort, D. L.
Taylor, Rt. Hon. Robert (Morpeth)


Healey, Denis (Leeds, S.E.)
Moyle, A.
Thomas, David (Aberdare)


Henderson, Rt. Hon. A. (Rowley Regis)
Mulley, F. W
Thomas, George (Cardiff)


Harbison, Miss M.
Murray, J. D.
Thomas, Iorwerth (Rhondda, W.)


Holman, P.
Nally, W.
Thomas, Ivor Owen (Wrekin)


Houghton, Douglas
Noel-Baker, Rt. Hon. P. J.
Thurtle, Ernest


Hoy, J. H.
Oldfield, W. H.
Tomney, F.


Hudson, James (Ealing, N.)
Oliver, G. H.
Turner-Samuels, M.


Hughes, Cledwyn (Anglesey)
Orbach, M.
Ungoed-Thomas, Sir Lynn


Hughes, Hector (Aberdeen, N.)
Oswald, T.
Viant, S. P.


Hynd, H. (Accrington)
Padley, W. E.
Wallace, H. W.


Hynd, J. B. (Attercliffe)
Paling, Rt. Hon. W. (Dearne Valley)
Watkins, T. E.


Irvine, A. J, (Edge Hill)
Paling, Will T. (Dewsbury)
Weitzman, D.


Irving, W. J (Wood Green)
Pannell, Charles
Wells, Percy (Faversham)


Isaacs, Rt. Hon. G. A.
Pargiter, G. A.
Wells, William (Walsall)


Janner, B.
Parker, J.
West, D. G


Jay, Rt. Hon. D. P. T.
Paton, J.
Wheatley, Rt. Hon. John


Jeger, Dr. Santo (St. Pancras, S.)
Peart, T. F.
White, Mrs. Eirene (E. Flint)


Jenkins, R. H. (Stechford)
Plummer, Sir Leslie
Whiteley, Rt. Hon. W.


Johnson, James (Rugby)
Popplewell, E.
Wigg, George


Johnston, Douglas (Paisley)
Porter, G.
Wilcock, Group Capt. C. A. B.


Jones, David (Hartlepool)
Price, Joseph T. (Westhoughton)
Wilkins, W. A.


Jones, Frederick Elwyn (West Ham, S.)
Price, Philips (Gloucestershire, W.)
Willey, Frederick (Sunderland, N.)


Jones, Jack (Rotherham)
Proctor, W. T.
Willey, Octavius (Cleveland)


Jones, T. W. (Merioneth)
Pursey, Cmdr. H
Williams, David (Neath)


Keenan, W.
Rankin, John
Williams, Rev. Llywelyn (Abertillery)


Kenyan, C.
Reid, Thomas (Swindon)
Williams, Ronald (Wigan)


Key, Rt. Hon. C. W.
Reid, William (Camlachie)
Williams, Rt. Hon. Thomas (Don V'll'y)


King, Dr. H. M.
Rhodes, H.
Williams, W. R. (Droylsden)


Kinley, J.
Richards, R.
Williams, W. T. (Hammersmith, S.)


Lee, Frederick (Newton)
Robens, Rt. Hon. A.
Wilson, Rt. Hon Harold (Huyton)


Lee, Miss Jennie (Cannock)
Roberts, Albert (Normanton)
Winterbottom, Ian (Nottingham, C.)


Lever, Leslie (Ardwick)
Roberts, Goronwy (Caernarvonshire)
Wyatt, W. L.


Lewis, Arthur
Rogers, George (Kensington, N.)
Yates, V F


Lindgren, G. S.
Ross, William



Lipton, Lt.-Col. M.
Royle, C.
TELLERS FOR THE AYES:


Logan, D. G.
Schofield, S. (Barnsley)
Mr. Pearson and




Mr. Kenneth Robinson.




NOES


Aitken, W. T.
Bennett, William (Woodside)
Carson, Hon. E.


Allan, R. A. (Paddington, S.)
Bevins, J. R. (Toxteth)
Cary, Sir Robert


Alport, C. J. M
Birch, Nigel
Channon, H.


Amery, Julian (Preston, N.)
Bishop, F. P.
Churchill, Rt. Hon W. S.


Amory, Heathcoat (Tiverton)
Black, C. W.
Clarke, Col. Ralph (East Grinstead)


Anstruther-Gray, Major W. J
Boothby, R. J. G
Cole, Norman


Arbuthnot, John
Bossom, A. C.
Conant, Maj. R. J. E.


Ashton, H. (Chelmsford)
Bowen, E. R.
Cooper, Sqn. Ldr. Albert


Assheton, Rt. Hon. R. (Blackburn, W.)
Boyd Carpenter, J. A.
Cooper-Key, E. M.


Astor, Hon. J. J. (Plymouth, Sutton)
Boyle, Sir Edward
Craddock, Beresford (Spelthorne)


Astor, Hon. W. W. (Bucks, Wycombe)
Braine, B. R.
Cranborne, Viscount


Baldock, Lt.-Cmdr J. M.
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)
Crookshank, Capt Rt. Hon. H. F. C


Baldwin, A. E.
Bromley-Davenport, Lt-Col. W. H.
Crosthwaite-Eyre, Col. O. E.


Banks, Col. C.
Brooke, Henry (Hampstead)
Crouch, R. F.


Barber, A. P. L.
Brooman-White, R. C.
Crowder, Sir John (Finchley)


Barlow, Sir John
Browne, Jack (Govan)
Crowder, Petre (Ruislip—Northwood)


Baxter, A. B.
Buchan-Hepburn, Rt. Hon. P. G. T.
Darling, Sir William (Edinburgh, S.)


Beach, Maj. Hicks
Bullard, D. G.
Davidson, Viscountess


Bell, Philip (Bolton, E.)
Bullus, Wing Commander E. E
Deedes, W F.


Bell, Ronald (Bucks, S.)
Burden, F. F. A.
Digby, S Wingfield


Bennett, F. M. (Reading, N.)
Butcher, H. W.
Dodds-Parker, A. D.


Bennett, Sir Peter (Edgbaston)
Butler, Rt. Hon. R. A. (Saffron Walden)
Donaldson, Cmdr C. E. McA.


Bennett, Dr. Reginald (Gosport)
Carr, Robert (Mitcham)
Donner, P. W.







Doughty, C. J. A
Lambton, Viscount
Robson-Brown, W.


Drayson, G. B.
Lancaster, Col. C. G.
Rodgers, John (Sevenoaks)


Dugdale, Maj. Rt. Hn. Sir T (Richmond)
Legge-Bourke, Maj. E. A. H.
Roper, Sir Harold


Duncan, Capt. J. A L
Legh, P. R. (Petersfield)
Ropner, Col. Sir Leonard


Duthie, W. S.
Lindsay, Martin
Russell, R. S.


Erroll, F. J.
Linstead, H. N.
Ryder, Capt. R. E. D


Fell, A.
Llewellyn, D. T.
Salter, Rt. Hon. Sir Arthur


Finlay, Graeme
Lloyd, Maj. Guy (Renfrew, E.)
Sandys, Rt. Hon. D.


Fisher, Nigel
Lockwood, Lt.-Col. J. C.
Schofield, Lt.-Col. W. (Rochdale)


Fleetwood-Hesketh, R. F.
Low, A. R. W.
Scott, R. Donald


Fletcher-Cooke, C.
Lucas, P. B. (Brentford)
Shepherd, William


Foster, John
Lucas-Tooth, Sir Hugh
Simon, J. E. S. (Middlesbrough, W.)


Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Lyttelton, Rt. Hon. O.
Smiles, Lt.-Col. Sir Walter


Fyfe, Rt. Hon. Sir David Maxwell
McAdden, S. J.
Smithers, Peter (Winchester)


Gage, C. H.
Macdonald, Sir Peter (I. of Wight)
Smithers, Sir Waldron (Orpington)


Galbraith, Cmdr. T. D. (Pollok)
Mackeson, Brig. H. R
Smyth, Brig. J. G. (Norwood)


Galbraith, T. G. D. (Hillhead)
McKibbin, A. J.
Soames, Capt. C.


Garner-Evans, E. H.
McKie, J. H. (Galloway)
Spearman, A. C. M


George, Rt. Hon. Mai. G. Lloyd
Maclean, Fitzroy
Speir, R. M.


Glyn, Sir Ralph
MacLeod, Rt. Hon Iain (Enfield, W.)
Spence, H. R. (Aberdeenshire, W.)


Godber, J. B.
MacLeod, John (Ross and Cromarty)
Spens, Sir Patrick (Kensington, S.)


Gomme-Duncan, Col. A
Macmillan, Rt. Hon. Harold (Bromley)
Stanley, Capt. Hon. Richard


Gough, C. F. H.
Macpherson, Maj. Niall (Dumfries)
Stevens, G. P.


Gower, H. R.
Maitland, Comdr. J. F. W. (Horncastle)
Stoddart-Scott, Col. M.


Graham, Sir Fergus
Maitland, Patrick (Lanark)
Storey, S.


Grimond, J.
Manningham-Buller, Sir R. E.
Strauss, Henry (Norwich, S.)


Grimston, Hon. John (St. Albans)
Markham, Major S. F.
Studholme, H. G.


Grimston, Sir Robert (Westbury)
Marples, A. E.
Summers, G. S.


Hare, Hon. J. H.
Marshall, Douglas (Bodmin)
Sutcliffe, H.


Harris, Frederic (Croydon, N.)
Marshall, Sir Sidney (Sutton)
Taylor, Charles (Eastbourne)


Harris, Reader (Heston)
Maudling, R.
Taylor, William (Bradford, N.)


Harrison, Col. J. H. (Eye)
Maydon, Lt.-Cmdr S. L. C.
Teeling, W.


Harvey, Ian (Harrow, E.)
Medlicott, Brig. F.
Thomas, Rt. Hon. J. P. L. (Hereford)


Harvie-Watt, Sir George
Mellor, Sir John
Thomas, P J. M. (Conway)


Hay, John
Molson, A. H. E.
Thompson, Kenneth (Walton)


Heald, Sir Lionel
Morrison, John (Salisbury)
Thompson, Lt.-Cdr R. (Croydon, W.)


Heath, Edward
Mott-Radclyffe, C. E
Thorneycroft, Rt. Hn. Peter (Monmouth)


Henderson, John (Cathcart)
Nabarro, G. D. N.
Thornton-Kemsley, Col. C. N


Higgs, J. M. C.
Nicholls, Harmar
Tilney, John


Hill, Dr. Charles (Luton)
Nicholson, Godfrey (Farnham)
Touche, Sir Gordon


Hill, Mrs. E. (Wythenshawe)
Nicolson, Nigel (Bournemouth, E.)
Tweedsmuir, Lady


Hinchingbrooke, Viscount
Nield, Basil (Chester)
Vane, W. M. F.


Hirst, Geoffrey
Noble, Cmdr. A. H. P.
Vaughan-Morgan, J. K


Holland-Martin, C. J
Nugent, G. R. H.
Vosper, D. F.


Hollis, M. C.
Oakshott, H. D.
Wade, D. W.


Holmes, Sir Stanley (Harwich)
Odey, G. W.
Wakefield, Edward (Derbyshire, W.)


Holt, A. F.
O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Wakefield, Sir Wavell (Marylebone)


Hope, Lord John
Ormsby-Gore, Hon. W. D.
Walker-Smith, D. C


Hopkinson, Henry
Orr, Capt. L. P. S.
Ward, Hon. George (Worcester)


Hornsby-Smith, Miss M P
Osborne, C
Ward, Miss I. (Tynemouth)


Horobin, I. M.
Partridge, E.
Waterhouse, Capt. Rt. Hon. C.


Horsbrugh, Rt. Hon. Florence
Peake, Rt. Hon. O
Watkinson, H. A.


Howard, Greville (St. Ives)
Peto, Brig. C. H. M.
Webbe, Sir H. (London &amp; Westminster)


Hudson, Sir Austin (Lewisham, N.)
Peyton, J. W. W.
Wellwood, W.


Hurd, A. R.
Pickthorn, K. W. M.
White, Baker (Canterbury)


Hutchinson, Sir Geoffrey (Ilford, N.)
Pitman, I. J.
Williams, Rt. Hon. Charles (Torquay)


Hutchison, Lt -Com. Clark (E'b'rgh W.)
Powell, J. Enoch
Williams, Gerald (Tonbridge)


Hyde, Lt.-Col. H M.
Price, Henry (Lewisham, W.)
Williams, Sir Herbert (Croydon, E.)


Jenkins, Robert (Dulwich)
Prior-Palmer, Brig. O. L.
Williams, R. Dudley (Exeter)


Jennings, R.
Profumo, J. D.
Wills, G.


Johnson, Eric (Blackley)
Raikes, H. V.
Wilson, Geoffrey (Truro)


Johnson, Howard (Kemptown)
Rayner, Brig. R.
Wood, Hon. R.


Jones, A. (Hall Green)
Redmayne, M.
York, C


Keeling, Sir Edward
Remnant, Hon. P.



Kerr, H. W. (Cambridge)
Renton, D. L. M.
TELLERS FOR THE NOES:


Lambert, Hon. G.
Roberts, Peter (Heeley)
Mr. Drewe and Mr. Kaberry.

Clause 8.—(DISCHARGE OR REDUCTION OF TAX IN CERTAIN CASES.)

Mr. Speaker: The next Amendment is to page 9, line 46, and is in the name of the right hon. Gentleman for Leeds, South (Mr. Gaitskell). I would remind the House that there was a long discussion on this matter in Committee, but I have selected this Amendment because some indication is given of further examination of the problem.

Mr. Pannell: I beg to move, in page 9, line 46, at the end, to insert:
(3) Any amount specified in the prescribed list in relation to a garment as hereinafter defined (not being an outsize garment or a special garment as hereinafter defined) made up at the request of the purchaser to measurements given by him to the seller and which has been cut singly by a special order cutter shall be deemed to be increased by fifteen per cent. of that amount.
(4) Any amount specified in the prescribed list in relation to an outsize garment or in relation to a special garment shall be deemed


to be increased by fifteen per cent, of that amount if not so made up and by thirty per cent. of that amount if so made up.
(5) in this section—
garment" means overcoat, suit, jacket, waistcoat, trousers, breeches or pantaloons, being in each case of men's or boys' wear;
outsize garment" means a garment being an overcoat to fit a person having a chest measurement (measured over the waistcoat) exceeding forty-two inches, a suit, jacket or waistcoat to fit a person having a chest measurement (measured over the waistcoat) exceeding forty-two inches, or a waist measurement (measured over the trousers) exceeding forty inches, and trousers, breeches or pantaloons to fit a person having a waist measurement (measured over the trousers) exceeding forty inches;
special garment" means a garment (not being an outsize garment) appropriate to a man not less than six feet three inches in height, such garment being an overcoat exceeding forty-eight inches in length, a jacket exceeding thirty-three inches in length and with a sleeve measurement exceeding thirty-four inches, trousers with an inside leg measurement exceeding thirty-four inches, or a suit comprising such a jacket and trousers.
I shall respect your Ruling, Mr. Speaker, but you will appreciate that this is an outsize Amendment, an Amendment concerned with outsizes—those who are too big for ordinary measurement above the standard size—and with the allowances previously made under the old Utility scheme. The House will see that the Amendment seeks to provide a 15 per cent. plus above ready made where there is bespoke tailoring or a 15 per cent. plus where there is a ready-made outsize garment, or to provide 30 per cent. plus for both of them.
In Committee we pressed the Financial Secretary before withdrawing the Amendment and, although the hon. Gentleman did not give a specific pledge, he said that the financial considerations of the proposal were negligible, that there was no difficulty in this respect, but that the difficulties were administrative and outside the Government service. Although he would not give an assurance, we thought that at the time a feasible scheme was being worked out. We pressed the hon. Gentleman to give a pledge and, as he was not able to do so, we said we would raise the question on the Report stage.
I am not going through the whole list of considerations, but I want to point out that earlier this evening the Govern-

ment found itself able to give way and make a valuable concession in the matter of a petrol allowance for invalid chairs. That was for people deformed or crippled in industry, but this Amendment not only relates to normal outsizes but those who have to be specially tailored because they are deformed or crippled. Ready-made garments do not fit everybody. I think it was Emerson who said:
Our bodies do not fit us but caricature and satirize us. Man is … borrowed equally from good and bad ancestors.
I do not know whether that is a good quotation.
Bacon was not so kind about tall men. He said that he never knew anybody put diamonds in a garret or a top storey, so tall men had little in their heads. I think that was rather unkind, I have too much respect for the hon. Member who associated himself very weightily with this plea on the previous occasion. The hon. Members for Gillingham (Mr. Burden), for Epsom (Mr. McCorquodale) and Bury and Radcliffe (Mr. W. Fletcher) approached this subject in Committee very drearily, as if fatness or outsize was an affliction, but all the literary references I have been able to find seem to suggest that fat people are a fairly cheerful lot.
The "Evening News" even "went to town" with a full-length leading article, because I had referred to the trade term of "excessive figuration." I did not coin the phrase; it is a trade term. So, for the benefit of the "Evening News" or those people who believe in pure English I refer to the fat, the corpulent, the plump, the plummy, the massive, the long and large and big. One is reminded of Shakespeare's line:
Sweep on, you fat and greasy citizens.
I do not know whether these are all appropriate quotations, but Shakespeare has referred to his preference to fat men.
I prefer Walt Whitman, who said:
I find no sweeter fat than sticks to my bones.
I am arguing for the male sex. If I were arguing in relation to female outsizers, which would be out of order, I would quote Wodehouse:
The girl had as many curves as a scenic railway.
The Amendment is well understood by the Government. It is a matter which has commanded the sympathy of the whole House, and I hope that the Finance


Secretary will be able to announce tonight that he has made some progress with his scheme.

Miss Alice Bacon: I shall not attempt to follow my hon. Friend the Member for Leeds, West (Mr. Pannell) in his literary quotations, nor will I repeat the arguments which we advanced during the Committee stage. The House will remember that on that occasion the Amendment was supported by Members on both sides of the Committee. It will also be remembered that in connection with women's garments we had down other Amendments designed to raise the D level according to the size of the garments.
We did not divide on this issue during the Committee stage because we thought that the hon. Gentleman was sympathetic, and that something would be done between the Committee stage and Report stage. Indeed, the hon. Gentleman said:
We have, as I readily concede, a real problem which, if it can be relieved without undue complication and an undue burden upon the wholesalers and manufacturers, we should like to relieve.
He went on to say:
my right hon. Friend is prepared to enter into discussions with the wholesalers and with the manufacturers with a view to seeing whether a satisfactory solution can now be worked out."—[OFFICIAL REPORT. 12th May, 1952; Vol. 500, c. 891–2.]
The fact that no Amendment has been put down by the right hon. Gentleman indicates, I presume, that as a result of those conversations it has been found impossible to do anything about this matter. I should like to ask the Financial Secretary what trade interests he has consulted because I have in my constituency many clothing manufacturers—both big and small firms—and the representations which I have had from all of them have been that I should endeavour to persuade the Government to do something not only for outsizes but also about the bespoke tailoring.
It would be interesting to know what trade interests have been consulted on this matter. The hon. Gentleman, when replying during the Committee stage, said that he did not think it would be impossible to evolve a scheme in which it was the measurement of the garment and not of the prospective and future wearer which was the main consideration. The Amend-

ments which we had on the Order Paper in regard to women's clothing were framed not in relation to the size of the garment but to the size of the wearer. If the hon. Gentleman thought that that was an objection, it would have been easy for him to have put Amendments on the Order Paper to meet that point.
I hope that we are to be given reasons why this Amendment has not been accepted and why there is to be no provision for outsizes and for bespoke tailoring. The Chancellor of the Exchequer has sent letters to some of us giving his reasons why he could not accept our Amendments on the Committee stage. I have not seen any letter recently about this matter but it may be that the Chancellor has good reasons.
Perhaps those reasons are as good as those he gave me in a letter which he sent to me about the size of women's coats, in which he advises women who object to paying the tax on three-quarter coats to go into the children's department, buy a child's coat, and that an ordinary sized woman can wear that child's coat as a three-quarter coat for herself. That, of course, is entirely ludicrous and it may be that the reasons to be stated tonight are as foolish as the reasons given in that letter.
I hope that the Government will think again on this matter and that we shall not have out-size people, and those people who, because of some peculiarity of figure, need bespoke tailoring, penalised twice, both in the cost of the garment and the extra tax they are called upon to pay.

10.0 p.m.

Mr. Boyd-Carpenter: I understand, both from the speeches to which we have listened and from the indication from the Chair, that the real purpose of moving this Amendment—on the subject of which, as hon. Members will recall, we had a prolonged discussion in Committee—is to elicit from the Government what steps have been taken as a result of the undertaking which it fell to me to give during that debate. I did point out in that debate, as has been said by the hon. Member for Leeds, West (Mr. Pannell), that it was not the cost to the Exchequer but the fact that administrative perplexities were involved; and that the dealing with those perplexities would, under the scheme, inevitably in a large degree fall upon the trades concerned.
In view of the merits of the matter, and because of the clear indication of opinion given by hon. Members, I undertook to go further into the matter and to consult with the trades concerned. In reply to a question from the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas), I made it clear that I thought it improbable that I should be able to give a complete answer by the Report stage. The reason I gave that indication was that this was not merely the normal consideration of a matter inside a Government Department, but that it involved consultations with a large number of outside interests.
I can, however, report the steps which we have taken. As the result of the undertaking I gave, we got in touch with all the leading trade associations on the matter. We gave them a little notice, and a meeting took place on 27th May, when rather varying views were put forward. The conclusions of most of the trade representatives concerned were rather tentative, both on the question of practicability and, practicability being assumed, on the method of implementation. I do not wish to give a false impression in either direction. We were certainly not left with the impression that a solution was impossible, nor that it was easy. The general impression which we were given was somewhere between the two.
As a result of that meeting and the considerable efforts made, I should like to say, by the trade associations concerned to be helpful, and because of their widely varying and different proposals, we asked them to let us have their views on the matter subsequently in writing. They were good enough to say they would do so, and in a number but not all of the cases their views in writing have now reached us. Some of them are still outstanding.
Quite clearly the matter is still far from being free from complication. It is clear also that further study with the trade is required before definite conclusions can be arrived at or announced to the House. The position, therefore, is somewhat as I anticipated it would be; that is to say, that our pursuit of a solution would meet with neither easy success nor easy failure, but that it would inevitably take a longer time than the interval between the Committee stage and the Report stage of this Bill.
The only comment I need add is that I do not withdraw to any extent at all the general expression of desire to help which I expressed during the Committee stage. We remain of the view that if we can deal with this matter without imposing a hopeless overload on the administration of the scheme, we should like to do so. I can give the assurance that we shall continue this discussion with the firm intention of achieving a reasonable solution, if possible.

Mr. John Edwards: While we are very glad to have the assurance of the Financial Secretary that the matter is to be further considered, I do not think that we can feel that his reply, taken as a whole, is satisfactory.
The burden of our complaint was, and must remain, that the Government seem to have blundered into this position without the slightest knowledge of the matter at all. If anything like reasonable discussions had taken place in the beginning, and if the Board of Trade had been properly involved in this matter, there is no doubt that this problem would have arisen then. That is a matter on which we feel strongly. Is it not true that this problem became a matter to which the Government directed their attention only when we raised it from this side of the House? No one on the Government side was aware of it until it was raised by us. That is inexcusable.

Mr. R. A. Butler: I do not know why the hon. Gentleman should say that the Government were not aware of this problem. The Government have had to handle an immense amount of detail in this Bill. As far as I am aware, there is not a single detail which has not engaged the earnest consideration of the Government. It is most unfair that the reply of the Financial Secretary, in which he referred to the associations with whom we have deliberately been negotiating, should be treated in this spirit. I must say that I do not think that it is according to the general spirit in which we have been conducting our discussions. This is a very difficult matter to which my hon. Financial Secretary has given a great deal of attention. I do not think that in this spirit the hon. Gentleman opposite will meet with any success.

Mr. Edwards: I am not sure whether the Chancellor was listening to what I


said at the beginning. I said that we were very pleased that these discussions were to continue. What the Chancellor has not explained is why, if he and his colleagues were aware of this matter before, the discussions could not have taken place earlier. The reason the Government are in no position to give any firm decision today is that the discussions took place after the Committee stage at the end of May, when they could very well have taken place earlier.
That is what we on this side are concerned about. That is why I say to the right hon. Gentleman that if he and his colleagues were aware of this matter there is no reason why the discussions should not have taken place earlier. Certainly we were left with the impression on the Committee stage that this was a

problem which we placed in front of the Government and that, because we brought it forward, the Government said that they would go into discussions with the trade associations.

If that is not so, I am sorry if I have misjudged the right hon. Gentleman; but on the facts as we know them that is the only construction that we are entitled to make. While we hope that these discussions will proceed, we must nevertheless register our protest at the fact that the matters were not properly considered at an earlier date by taking the matter to a Division.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 233; Noes, 248.

Division No. 171.]
AYES
[10.9 p.m.


Adams, Richard
Donnelly, D. L.
Jenkins, R. H. (Stechford)


Albu, A. H.
Dugdale, Rt. Hon. John (W. Bromwich)
Johnson, James (Rugby)


Allen, Scholefield (Crewe)
Ede, Rt. Hon. J. C.
Johnston, Douglas (Paisley)


Anderson, Alexander (Motherwell)
Edwards, John (Brighouse)
Jones, David (Hartlepool)


Awbery, S. S.
Edwards, Rt. Hon. Ness (Caerphilly)
Jones, Frederick Elwyn (West Ham, S.)


Bacon, Miss Alice
Evans, Albert (Islington, S.W.)
Jones, Jack (Rotherham)


Baird, J.
Evans, Edward (Lowestoft)
Jones, T. W. (Merioneth)


Balfour, A.
Evans, Stanley (Wednesbury)
Keenan, W.


Barnes, Rt. Hon. A. J.
Ewart, R.
Kenyon, C.


Bellenger, Rt. Hon. F. J.
Fernyhough, E.
Key, Rt. Hon. C. W.


Bence, C. R.
Field, W. J.
King, Dr. H. M.


Benn, Wedgwood
Finch, H. J.
Kinley, J.


Benson, G.
Fletcher, Eric (Islington, E.)
Lee, Frederick (Newton)


Beswick, F.
Follick, M.
Lee, Miss Jennie (Cannock)


Bevan, Rt. Hon. A. (Ebbw Vale)
Foot, M. M.
Lever, Harold (Cheetham)


Bing, G. H. C.
Forman, J. C.
Lever, Leslie (Ardwick)


Blackburn, F.
Fraser, Thomas (Hamilton)
Lewis, Arthur


Blenkinsop, A.
Freeman, John (Watford)
Lindgren, G. S.


Blyton, W. R.
Freeman, Peter (Newport)
Lipton, Lt.-Col. M.


Boardman, H.
Gaitskell, Rt. Hon. H. T. N.
Logan, D. G.


Bottomley, Rt. Hon. A. G.
Gibson, C. W.
MacColl, J. E.


Bowden, H. W.
Glanville, James
McGhee, H. G.


Braddock, Mrs. Elizabeth
Gordon Walker, Rt. Hon. P. C.
McGovern, J.


Brockway, A. F.
Greenwood, Anthony (Rossendale)
McInnes, J.


Brook, Dryden (Halifax)
Grey, C. F.
McKay, John (Wallsend)


Broughton, Dr. A. D. D.
Griffiths, David (Rother Valley)
McLeavy, F.


Brown, Rt. Hon. George (Belper)
Griffiths, William (Exchange)
McNeil, Rt. Hon. H.


Brown, Thomas (Ince)
Hale, Leslie (Oldham, W.)
MacPherson, Malcolm (Stirling)


Burton, Miss F. E.
Hall, Rt. Hon. Glenvil (Colne Valley)
Mallalieu, J. P. W. (Huddersfield, E.)


Butler, Herbert (Hackney, S.)
Hall, John (Gateshead, W.)
Mann, Mrs. Jean


Callaghan, L. J.
Hamilton, W. W.
Manuel, A. C.


Carmichael, J.
Hardy, E. A.
Marquand, Rt. Hon. H. A.


Castle, Mrs. B. A.
Hargreaves, A.
Mayhew, C. P.


Champion, A. J.
Hayman, F. H.
Mellish, R. J.


Chapman, W. D.
Healey, Denis (Leeds, S.E.)
Mitchison, G. R.


Chetwynd, G. R.
Henderson, Rt. Hon. A. (Rowley Regis)
Monslow, W.


Clunie, J.
Herbison, Miss M.
Moody, A. S.


Coldrick, W.
Hobson, C. R.
Morgan, Dr. H. B. W.


Collick, P. H.
Holman, P.
Morley, R.


Corbet, Mrs. Freda
Houghton, Douglas
Morris, Percy (Swansea, W.)


Cove, W. G.
Hoy, J. H.
Morrison, Rt. Hon. H. (Lewisham, S.)


Craddock, George (Bradford, S.)
Hudson, James (Eating, N.)
Mort, D. L.


Crossman, R. H. S.
Hughes, Cledwyn (Anglesey)
Moyle, A.


Cullen, Mrs. A.
Hughes, Emrys (S. Ayrshire)
Mulley, F. W.


Daines, P.
Hughes, Hector (Aberdeen, N.)
Murray, J. D.


Dalton, Rt. Hon. H.
Hynd, H. (Accrington)
Nally, W.


Darting, George (Hillsborough)
Hynd, J. B. (Attercliffe)
Noel-Baker, Rt. Hon. P. J


Davies, A. Edward (Stoke, N.)
Irving, W. J. (Wood Green)
Oliver, G. H.


Davies, Harold (Leek)
Isaacs, Rt. Hon. G. A.
Orbach, M.


Deer, G.
Janner, B.
Oswald, T.


Delargy, H. J.
Jay, Rt. Hon. D. P. T.
Padley, W. E.


Dodde, N. N.
Jeger, Dr. Santo (St. Pancras, S.)
Paling, Rt. Hon. W. (Dearne Valley)




Paling, Will T. (Dewsbury)
Shurmer, P. L. E.
Viant, S. P.


Pannell, Charles
Silverman, Julius (Erdington)
Wallace, H. W.


Pargiter, G. A.
Silverman, Sydney (Nelson)
Watkins, T. E.


Paton, J.
Simmons, C. J. (Brierley Hill)
Weitzman, D.


Pearson, A.
Slater, J.
Wells, Percy (Faversham)


Peart, T. F.
Smith, Ellis (Stoke, S.)
Wells, William (Walsall)


Plummer, Sir Leslie
Smith, Norman (Nottingham, S.)
West, D. G.


Popplewell, E.
Snow, J. W.
Wheatley, Rt. Hon. John


Porter, G.
Sorensen, R. W.
White, Mrs. Eirene (E. Flint)


Price, Joseph T. (Westhoughton)
Soskice, Rt Hon. Sir Frank
Whiteley, Rt. Hon. W.


Price, Philips (Gloucestershire, W.)
Sparks, J. A.
Wigg, George


Proctor, W. T.
Stewart, Michael (Fulham, E.)
Wilkins, W A.


Pursey, Cmdr. H.
Stokes, Rt. Hon. R. R.
Willey, Frederick (Sunderland, N.)


Rankin, John
Strachey, Rt. Hon. J.
Willey, Octavius (Cleveland)


Reid, Thomas (Swindon)
Strauss, Rt. Hon. George (Vauxhall)
Williams, Rev. Llywelyn (Abertillery)


Reid, William (Camlachie)
Summerskill, Rt. Hon. E.
Williams, Ronald (Wigan)


Rhodes, H.
Swingler, S. T.
Williams, Rt. Hon. Thomas (Don V'll'y)


Richards, R.
Sylvester, G. O.
Williams, W. R. (Droylsden)


Robens, Rt. Hon. A.
Taylor, John (West Lothian)
Williams, W. T. (Hammersmith, S.)


Roberts, Albert (Normanton)
Taylor, Rt. Hon. Robert (Morpeth)
Wilson, Rt. Hon. Harold (Huyton)


Roberts, Goronwy (Caernarvonshire)
Thomas, David (Aberdare)
Winterbottom, Ian (Nottingham, 6.)


Rogers, George (Kensington, N.)
Thomas, George (Cardiff)
Wyatt, W. L


Rots, William
Thomas, Iorwerth (Rhondda, W.)
Yates, V. F.


Royle, C.
Thomas, Ivor Owen (Wrekin)



Schofield, S. (Barnsley)
Thurtle, Ernest
TELLERS FOR THE AYES:


Shinwell, Rt. Hon. E.
Turner-Samuels, M.
Mr. Hannan and


Short, E. W.
Ungoed-Thomas, Sir Lynn
Mr. Kenneth Robinson




NOES


Aitken, W. T.
Cranborne, Viscount
Holt, A. F.


Alian, R. A. (Paddingion, S.)
Crosthwaite-Eyre, Col. O. E.
Hope, Lord John


Alport, C. J. M.
Crouch, R. F.
Hopkinson, Henry


Amery, Julian (Preston, N.)
Crowder, Petre (Ruislip—Northwood)
Hornsby-Smith, Miss M. P


Amory, Heathcoat (Tiverton)
Darling, Sir William (Edinburgh, S.)
Horobin, I. M.


Anstruther-Gray, Major W. J.
Davidson, Viscountess
Horsbrugh, Rt. Hon. Florence


Ashton, H. (Chelmsford)
Deedes, W. F.
Howard, Greville (St. Ives)


Assheton, Rt. Hon. R. (Blackburn, W.)
Digby, S. Wingfield
Hudson, Sir Austin (Lewisham, N.)


Astor, Hon. J. J. (Plymouth, Sutton)
Dodds-Parker, A. D.
Hurd, A. R.


Astor, Hon. W. W. (Bucks, Wycombe)
Donaldson, Cmdr. C. E. McA
Hutchinson, Sir Geoffrey (Ilford, N.)


Baldock, Lt.-Cmdr. J. M.
Donner, P. W.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Baldwin, A. E.
Doughty, C. J. A.
Hyde, Lt.-Col. H. M.


Banks, Col. C.
Drayson, G. B.
Jenkins, Robert (Dulwich)


Barber, A. P. L.
Dugdale, Maj. Rt. Hn. Sir T. (Richmond)
Johnson, Eric (Blackley)


Barlow, Sir John
Duncan, Capt. J. A L.
Johnson, Howard (Kemptown)


Baxter, A. B.
Duthie, W. S.
Jones, A. (Hall Green)


Beach, Maj. Hicks
Erroll, F. J
Kaberry, D.


Beamish, Maj. Tufton
Fell, A.
Keeling, Sir Edward


Bell, Philip (Bolton, E.)
Finlay, Graeme
Kerr, H. W. (Cambridge)


Bell, Ronald (Bucks, S.)
Fisher, Nigel
Lambert, Hon. G.


Bennett, F. M. (Reading, N.)
Fleetwood-Hesketh, R. F.
Lambton, Viscount


Bennett, Sir Peter (Edgbaston)
Fleteher-Cooke, C.
Lancaster, Col. C. G.


Bennett, Dr. Reginald (Gosport)
Foster, John
Legge-Bourke, Maj. E. A. H


Bennett, William (Woodside)
Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Legh, P. R. (Petersfield)


Bevins, J. R. (Toxleth)
Gage, C. H.
Lindsay, Martin


Birch, Nigel
Galbraith, Cmdr. T. D. (Pollok)
Linstead, H. N.


Bishop, F. P.
Galbraith, T. G. D. (Hillhead)
Llewellyn, D. T.


Black, C. W.
Garner-Evans, E. H.
Lloyd, Maj. Guy (Renfrew, E.)


Boothby, R. J. G
George, Rt. Hon. Maj. G. Lloyd
Lockwood, Lt.-Col. J. C.


Bottom, A. C.
Glyn, Sir Ralph
Lucas, P. B. (Brentford)


Bowen, E. R.
Godber, J. B.
Lucas-Tooth, Sir Hugh


Boyd-Carpenter, J A.
Gomme-Duncan, Col. A
Lyttelton, Rt. Hon. O.


Boyle, Sir Edward
Gough, C. F. H.
McAdden, S. J.


Braine, B. R.
Gower, H. R.
Macdonald, Sir Peter (I. of Wight)


Bromley-Davenport, Lt.-Col. W. H.
Graham. Sir Fergus
Mackeson, Brig. H. R.


Brooke, Henry (Hampstead)
Grimond, J.
McKibbin, A. J.


Brooman-White, R. C.
Grimston, Hon. John (St. Albans)
McKie, J. H. (Galloway)


Browne, Jack (Govan)
Grimston, Sir Robert (Westbury)
Maclean, Fitzroy


Buchan-Hepburn, Rt. Hon P. G. T.
Hare, Hon. J. H.
MacLeod, John (Ross and Cromarty)


Bullard, D. G.
Harris, Frederic (Croydon, N.)
Macmillan, Rt. Hon. Harold (Bromley)


Burden, F. F. A.
Harris, Reader (Heston)
Macpherson, Maj. Niall (Dumfries)


Butcher, H. W.
Harrison, Col. J. H. (Eye)
Maitland, Comdr. J. F. W. (Horncastle)


Butler, Rt. Hon. R. A. (Saffron Walden)
Harvey, Ian (Harrow, E.)
Maitland, Patrick (Lanark)


Carr, Robert (Mitcham)
Hay, John
Manningham-Buller, Sir R. E.


Carson, Hon. E.
Heald, Sir Lionel
Markham, Major S F.


Gary, Sir Robert
Heath, Edward
Marshall, Douglas (Bodmin)


Shannon, H.
Henderson, John (Cathcart)
Marshall, Sir Sidney (Sutton)


Churchill, Rt. Hon. W. S.
Higgs, J. M. C
Maudling, R.


Clarke, Col. Ralph (East Grinstead)
Hill, Dr. Charles (Luton)
Maydon, Lt.-Cmdr S. L. C.


Cole, Norman
Hill, Mrs. E. (Wythenshawe)
Medlicott, Brig. F.


Sonant, Maj. R. J. E.
Hinchingbrooke, Viscount
Mellor, Sir John


Cooper, Sqn. Ldr. Albert
Hirst, Geoffrey
Molson, A. H. E.


Cooper-Key, E. M.
Holland-Martin, C. J.
Morrison, John (Salisbury)


Craddock, Beresford (Spelthorne)
Hollis, M C
Mott-Radclyffe, C. E







Nabarro, G. D. N
Ropner, Col. Sir Leonard
Thorneycroft, Rt. Hn. Peter (Monmouth)


Nicholls, Harmar
Russell, R. S.
Thornton-Kemsley, Col. C. N


Nicholson, Godfrey (Farnham)
Ryder, Capt. R. E. D.
Tilney, John


Nicolson, Nigel (Bournemouth, E)
Salter, Rt. Hon. Sir Arthur
Touche, Sir Gordon


Nield, Basil (Chester)
Schofield, Lt.-Col. W. (Rochdale)
Tweedsmuir, Lady


Noble, Cmdr. A. H. P.
Shepherd, William
Vane, W. M. F.


Nugent, G. R. H.
Simon, J. E. S. (Middlesbrough, W.)
Vaughan-Morgan, J. K.


Oakshott, H. D
Smiles, Lt.-Col. Sir Walter
Vosper, D. F.


Odey, G. W.
Smithers, Peter (Winchester)
Wade, D. W.


O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Smithers, Sir Waldron (Orpington)
Wakefield, Edward (Derbyshire, W.)


Ormsby-Gore, Hon. W. D.
Smyth, Brig. J. G. (Norwood)
Wakefield, Sir Wavell (Marylebone)


Orr, Capt. L. P. S.
Soames, Capt. C.
Walker-Smith, D. C.


Osborne, C.
Spearman, A. C. M
Ward, Hon. George (Worcester)


Partridge, E.
Speir, R. M.
Ward, Miss I. (Tynemouth)


Peake, Rt. Hon. O.
Spence, H. R. (Aberdeenshire, W.)
Waterhouse, Capt. Rt. Hon. C


Peto, Brig. C. H. M.
Spens, Sir Patrick (Kensington, S.)
Watkinson, H. A.


Peyton, J. W. W.
Stanley, Capt. Hon Richard
Webbe, Sir H. (London &amp; Westminster)


Pickthorn, K. W. M.
Stevens, G. P.
Wellwood, W.


Pitman, I. J.
Stoddart-Scott, Col. M.
While, Baker (Canterbury)


Powell, J. Enoch
Storey, S.
Williams, Gerald (Tonbridge)


Price, Henry (Lewisham, W.)
Strauss, Henry (Norwich, S.)
Williams, Sir Herbert (Croydon, E.)


Profumo, J. D.
Summers, G. S.
Williams, R. Dudley (Exeter)


Raikes, H. V.
Sutcliffe, H.
Wills, G.


Rayner, Brig. R.
Taylor, Charles (Eastbourne)
Wilson, Geoffrey (Truro)


Redmayne, M.
Taylor, William (Bradford, N.)
Wood, Hon. R.


Remnant, Hon. P.
Teeling, W.
York, C.


Roberts, Peter (Heeley)
Thomas, Rt. Hon J. P. L. (Hereford)



Robson-Brown, W
Thomas, P. J. M. (Conway)
TELLERS FOR THE NOES:


Rodgers, John (Sevenoaks)
Thompson, Kenneth (Walton)
Mr. Drewe and Mr. Studholme.


Roper, Sir Harold
Thompson, Lt.-Cdr R. (Croydon, W.)

Mr. R. A. Butler: I beg to move, in page 11, line 33, at the end, to insert:
Provided that as respects the periods mentioned in Part III of the Fourth Schedule to this Act the prescribed lists shall be the lists contained in Parts I and II of that Schedule modified in accordance with the said Part III.
This Amendment is consequential upon certain concessions which were made by Ministers in the course of earlier debates relating to certain footwear, bootees and so forth, fur garments, cloth, bedspreads, curtains and tablecloths. If this is read in conjunction with the new Part III which is added to the Fourth Schedule the following result will be observed by close students of Parliamentary drafting, but it is almost incomprehensible.
It is that 14th May will be fixed for the date of introduction of the footwear and fur garments concession, 3rd June for Class B material weighing not less than six ozs. and 18th June for cloth and certain linen articles of Class C material. [An HON. MEMBER: "Injustice."] I think it would be a pity if hon. Members regarded attempts made by the Government to meet the wishes of the House as injustice, because that is not the way to obtain justice.
This gives legal effect to D figures which operated before the changes were made and this Amendment provides that for the initial period between the introduction of the scheme, that is 17th March, and the operation of the new reliefs which I have just announced, the final D lists which are Part I and II of

the Fourth Schedule are modified as shown in the new Part III, and this new Part III is added to the Bill and sets out the relevant D figures as they operate during the periods. So this combination of hallucinations results in absolute clarity.

Amendment agreed to.

Clause 13.—(ALTERATIONS IN EXISTING PERSONAL RELIEFS, ETC.)

The Solicitor-General (Sir Reginald Manningham-Buller): I beg to move, in page 16, line 9, at the end, to insert:
(4) In paragraph (b)of subsection (3) of section two hundred and twelve of the said Act (which relates to relief in respect of children undergoing training) for the reference to thirteen pounds there shall be substituted a reference to twenty-six pounds.
This Amendment fulfils the hope which I expressed in the course of the Committee stage in answer to an Amendment by my hon. Friend the Member for Garston (Mr. Raikes). We had a long discussion during the Committee stage with regard to the amount which an apprentice and an articled clerk and those undergoing training in a trade or profession, without attending a full-time educational establishment, should be allowed to earn without their parents losing the child allowance.
Under the law as it has stood since 1938 the amount was £13 a year, not taking into account any amount paid to the child by way of a refund of premium. I said on the Committee stage that it


might be possible, and we hoped it would be possible, to make some adjustments to the figure of £13 without departing from the principle which has been in existence since 1938—the principle of distinguishing between those in full-time educational establishments and those who, to some extent, are embarking upon their careers and earning their living.
I said that a departure from that principle must, we felt, await the report of the Royal Commission. This Amendment gives effect to the hope which I expressed on the Committee stage by increasing from £13 to £26 the amount an apprentice can earn without his parents losing the child allowance.

Mr. Douglas Houghton: I beg to move, as an Amendment to the proposed Amendment, to leave out "twenty-six," and to insert "eighty-five."
I hope that the Chancellor will not be offended if I say that while relieving an injustice, his proposed Amendment perpetuates an injustice. The hon. and learned Gentleman suggested a moment ago that any departure from the principle embodied in the change in the law in 1938 should await the report of the Royal Commission. The Chancellor of the Exchequer did not await the report of the Royal Commission before introducing an entirely new tax on profits, one of the matters referred to the Royal Commission. He has proposed to the House substantial changes in the incidence of the Profits Tax without awaiting the report of the Royal Commission.
The truth of the matter is that the right hon. Gentleman awaits the report of the Royal Commission when he does not want to be bothered about doing anything before the Royal Commission reports, but when he is impelled or desires to do anything before the Royal Commission reports, he regards himself as perfectly free not only to do things but to do revolutionary things about direct taxation.
Why is the proposed £26 in the Amendment not enough? What the Chancellor has done is what I feared he would do, and that is to regard 1938 as his base line and ask himself what has happened since 1938 to justify a change in the limit of earnings of an apprentice or a trainee for the purpose of the child allowance. He has, no doubt, said to himself, "If we

double the 1938 limit it will be about right. "What criteria has he taken in arriving at that amount of £26?
Although we have not been told—and I regret that the extreme brevity of the speech of the Solicitor-General threw little light on what was in the mind of the hon. and learned Gentleman—the Chancellor may have had in mind the rise in the level of wages since 1938, and he might have said to himself, "Well, wages have risen about 100 per cent., so if we increase the limit of earnings of an apprentice by 100 per cent. that will be about right." Or he may have taken the relationship between the amount of the child allowance in 1938, which was £60, and the amount of the child allowance proposed in the Bill, which is £85, and said, "Well, if I double the £13 that will be ample measure in making a change based upon that criterion."
I submit that the base line of 1938 was wrong. The discrimination then shown against the trainee and apprentice was, in my judgment, indefensible. I am fully aware that in 1938 an Amendment was moved by a late and distinguished Member of this House, Mr. Tinker, who was then the hon. Member for Leigh. On the Report stage of the Finance Bill in 1938 Sir John Simon, as he then was, the then Chancellor, on 11th July embodied in the Bill an Amendment which substantially reflected the purpose of the then hon. Member for Leigh, and £13 was the amount proposed by Mr. Tinker and the amount accepted by the then Chancellor of the Exchequer.
I doubt, however, whether Mr. Tinker could have realised how unfair that figure was and how unfair the doubling of the figure now is to the parents who put their boys and girls to train for a trade, vocation or profession. There is certainly one thing that Mr. Tinker could not have known, and that was the decision in the High Court in the case of Miles v. Morrow, which put an entirely different complexion upon the concession given in 1938.
In 1938, the £13 limit on earnings of an apprentice was to exclude any moneys returned to the child by way of return of premium. Although that was not included in the £13, the decision in the case of Miles v. Morrow held that payment by way of return of premium had to be included in the overriding limit of income


of the child for the purpose of the provisions of the 1920 Act. Therefore, anomalies immediately arise which, I am sure, were not foreseen at the time when the Amendment was agreed to in 1938.
10.30 p.m.
What is the real criticism of the proposed Amendment to the Bill now, and what is the criticism of the principle which the hon. and learned Gentleman does not wish to disturb in advance of the report of the Royal Commission? It is that he wishes to retain the inferior status of the trainee and of the apprentice as compared with the child who is receiving further education. That is the real criticism.
Educational grants do not count as part of the income of a child who remains at school or goes to the university after the age of 16. It does not matter what amount it is: an educational grant or bursary is not reckoned as income of the child for the purpose of computing the maximum income which the child is permitted to have in its own right while qualifying for the full child allowance.
A university undergraduate getting a substantial grant can take up work during the vacation and, provided he does not earn more than £85 in the whole year, his parents will get the full child allowance. The apprentice who earns more than £26 a year is, under the hon. and learned Gentleman's Amendment, out; and even if he earns less than £26, but his income by way of return of premium together with the earnings of less than £26 together exceed £85, the parents will get no allowance at all.
I will give the hon. and learned Gentleman a few examples of the absurdity of the present position. A father has a child at the university who holds a scholarship worth £250 a year. The child also has further income from a settlement from his grandfather of £84 a year. The father is entitled to the child allowance in full for that child.
Look at another case. A father has apprenticed his child, and has paid a premium of £200 for a two-year course. The child receives by way of wages, apart from return of premium, say, £27 a year, and the child also receives by way of return of premium £60 a year. Although the £60 return of premium does not count as part of the

£26 limit on earnings it counts as part of the total income the child can have for the purpose of child allowance, and so, in his case, since his earnings plus return of premium amount to £87, his parents will get no allowance at all.
Let us take another case. A father has apprenticed his child, and the father has paid £110 premium for a two-year course, and the child receives a salary or wages or emoluments—call them what you will—of £27, and in addition he gets by way of return of premium £55 for each of the two years. The father is not entitled to the child allowance because the emoluments are over £26, and he does not get the child allowance even though the total income of the child is only £82.
Take another case of a father who apprentices his child, who pays no premium, but whose child receives by way of wages, say, £30 a year only. The parent of that child is barred from receiving child allowance. Who is going to say that there is any equity or fairness as compared with the first example—of the child who is an undergraduate with £84 of private income and an educational grant of £250 a year, and whose father can have the full child allowance? How does that compare with the case of an apprentice whose total earnings and income, with no premium paid, amount to £30 a year? It is assumed in his case that it costs his parents nothing to maintain him, and, therefore, no child allowance is granted to him.
I say—and I apologise for taking up a disproportionate amount of the time of the House, certainly in contrast to the amount taken by the hon. and learned Gentleman in moving the proposed Amendment—that the present arrangements discriminate against technological education. The parents of an apprentice should be put on the same footing as the parents of a student, and I say that it is unjust, in my view, that even the return of premiums should be reckoned for any purpose in accounting for the income of the child in relation to child allowance. Why should money paid by the parent in relation to the training of the child be regarded as the income of that child?
For all these reasons I hope that we may be told that there will be some re-consideration of this matter. Might I, at the same time, also ask that the


hon. and learned Gentleman should not say that he is awaiting the report of a Royal Commission while anomalies are staring him in the face?
Only yesterday we considered a proposed change recommended thirty-two years ago; that was a recommendation of a Royal Commission, but the right hon. Gentleman was not prepared to advise the House to accept it even now. He preferred to wait for further evidence. We were told that we had to wait for the bigger change; but tonight, there is a proposed change which we are told is too big, and that we must await the smaller changes. I ask that we shall not delay in this way.

Mr. James McInnes: I beg to second the Amendment to the proposed Amendment.
I was rather astonished by the speech of the Solicitor-General because he indicated that during the Committee stage of the Bill we had a somewhat lengthy discussion. But, in fact, the discussion then was exceedingly short, due entirely to the Chancellor himself, who intervened to shorten the debate by indicating that he would give this matter serious consideration. He was extremely sympathetic to the views which had been expressed, but now we find that the consideration which has been given has been very scant indeed.
We have had no indication as to the exact basis upon which the Government have determined the figure of £26. We on this side of the House feel that this is an intolerable anomaly so far as Income Tax allowances are concerned. Furthermore, no explanation has been given as to why the training of the apprentice should be treated differently from the educating of all other children, under or over 16 years of age. Those over 16, attending an educational establishment, or college, or university, find that their parents are getting tax allowances of £85.
Take the case of the aspiring young solicitor who may go to a university to qualify for his LL.B.; the parents in that case get the £85 allowance. But the young apprentice, or the boy or girl who articles himself or herself to a solicitor finds that he can earn only £13 without his parents losing the child allowance. The £13 would hardly pay the National

Insurance contributions of that young person; and yet one has to consider all the travelling expenses and fees which are involved in a case of that kind.
The consideration which we were promised does not seem to have been given, or, if it has, then it is unworthy of the Chancellor. I appeal to the Chancellor to give serious thought to this Amendment to the proposed Amendment, and I hope that his consideration will be favourable.

Mr. Victor Raikes: I have always taken the view that half a loaf is better than no bread. I venture to intervene in this discussion since I did, at an earlier stage, move the original Amendment. I hold the view that there is a very strong argument for not differentiating between the parent of a trainee and the parent of a child at college, or something of that sort.
At the same time, when I listened to the passion and vigour of the hon. Member for Sowerby (Mr. Houghton) it occurred to me that last year, when this point was raised from these benches and received from the Government of the day very favourable consideration, absolutely nothing was done. When we hear about all these horrible anomalies which, year after year, are never looked at, it seems to come very ill from hon. Gentlemen opposite to speak with quite the passion that they have spoken. At any rate, we have done twice as much as the last Government.
When the Royal Commission consider this matter I think they will find that the case for equality between apprenticeships and full-scale education is unanswerable in the long run. At this stage I am prepared to welcome the Chancellor's Amendment, and to thank him for having taken this matter a step further than the party opposite ever did in the six years during which they were in office.

Mr. Thomas Fraser: The Solicitor-General, in moving the Amendment, said that the Government could not go further than this £26 because this principle had remained inviolate and they could not do anything about it until they had the report of the Royal Commission. That is complete nonsense. What really annoys us is that failure to accept the Amendment to the proposed Amendment moved by my hon. Friend


the Member for Sowerby (Mr. Houghton) is a denial of the principle that the young person who is an apprentice or a full-time trainee should receive equal treatment with the young person who is in receipt of full-time education at a university, school or college, or any other educational establishment.
We are not asking as much for the trainee or apprentice as is allowed in the case of the young person who is in full-time attendance at an educational establishment, because, as the hon. Member for Sowerby has said, the young person at an educational establishment may well be in receipt of a bursary or some other form of educational endowment. That educational endowment is not included or calculated as part of that young person's income, although it may be £100, £200 or £300 a year.
In addition to that sum that young person may have an income, either earned or unearned, of £85 a year, and yet his father will still be entitled to the child allowance under Income Tax law. The parent of that young child is manifestly treated rather generously. If one takes the young person's bursary or educational endowment and adds it to his income, earned or unearned, he may have £300 or £400 a year, and yet the father gets Income Tax relief; but the father of the young person who happens to be in training for some most useful job in the economic life of this country and who earns more than £26 a year is denied this relief.
Surely it would only be equitable to permit the parents of that young person to get Income Tax relief, provided that young person earned not more than £85 a year. Why should we wait for the report of the Royal Commission? I would have thought that the case is unanswerable. Young persons being trained in industry, or in the professions, who receive incomes of £20, £30, or £50 a year ought to be treated as children for the purpose of computing their parents' entitlement to relief. I hope that the House will decide, on this last opportunity this year to consider this matter, that a young person being trained for industry, or for a profession, outside an educational establishment, can be treated in the same way as a young person attending an educational establishment.

10.45 p.m.

The Solicitor-General: The hon. Member for Sowerby (Mr. Houghton) complained of the brevity of the speech with which I moved the Amendment to which there has since been a proposed Amendment moved. I cannot make the same complaint about his speech. It seemed to bear some resemblance to one made with equal force and vigour during the Committee stage, though not in the previous six years. I am a little surprised to hear the hon. Member for Hamilton (Mr. T. Fraser) express such keen annoyance about the existence of this discrepancy, which his Government—of which he was a Member—allowed to exist for the last six years.
I am also a little surprised that the hon. Member for Sowerby should say that the Chancellor has done what he feared he would do. I think I made clear, during the Committee stage, what it was that the Government hoped to be able to do on Report. Although the hon. Member may think it is not enough, it is certainly an improvement. I do not think anyone can dispute that.
Arguments have been put with great force on both sides for the abolition of what appears to many to be an anomaly. The late Government having set up a Royal Commission, there is something to be said for awaiting its conclusions on this problem before making a departure from the principle which has existed, rightly or wrongly, since 1938. In moving this Amendment, we have sought to carry out precisely what was said in the course of the Committee stage.
I said then, and I say again, that we feel that a departure from that principle must await the report of the Royal Commission. I think it is not only a question of whether the figure should be £13, £26, or £85 in relation to apprentices which will fall for consideration by the Royal Commission. That is what we said on the Committee stage. That is what I must say again, although I realise that it will not satisfy all hon. Members. They have, I think, made their arguments in support of abolition of the distinction very clear, and I am sure that the Royal Commission will pay regard to what they have said.
We have proposed this improvement—that is, the Amendment which I have moved—and the proposed Amendment


moved by the hon. Member for Sowerby merely revives the discussion we had in the Committee stage on exactly the same point. I suggest to him that there is something to be said, even if he is not entirely satisfied for acceptance on this occasion of half a loaf.

Mr. Ede: The trouble is that this is not half a loaf. The gusto with which the hon. Member for Garston (Mr. Raikes) announced that he was prepared to accept half a loaf wears rather thin when one remembers that this is rather less than one-third of a loaf, and I never heard anyone express a desire for that.

Captain J. A. L. Duncan: It is double last year's loaf.

Mr. Ede: I will come to that point in a minute. I have sat on the opposite side of the House for six years hearing the continual complaint that we were bringing in too much legislation and initiating too many changes in the law of the country. Yet now if we carry on the good work that we should have done had we still been on the other side of the House it is held to be quite wrong and almost criminal for us to suggest that when we left office the whole world had not been made completely satisfactory to everybody.
I made a short speech during the Committee stage, and I suppose that if I adopted tonight an argument different from the one I then used, that would be used by the Solicitor-General to say, "See how these people shift their ground. On Committee stage they dealt with the relation between practical and academic education but now they come forward with some fresh argument. They cannot be right on both occasions, and quite probaby they are wrong on both occasions." It is not good enough. We raised this very important point of general principle on the Committee stage.

Captain Duncan: It was raised on this side of the House.

Mr. Ede: We raised it a little higher. If two people raise a heap of any kind surely both are entitled to some credit for it. I do not mind saying that the Amendment of the hon. and gallant Gentleman the Member for South Angus (Captain Duncan), supported by the hon. Member for Garston, was the one which was called. We also had an Amendment

on the Order Paper, but one was taken and the other left. That is in accordance with sound Scriptural precedent, and we do not complain about it.
I want to impress on the Chancellor of the Exchequer that the really full working out of the Education Act, 1944, can never be achieved while there is this astounding distinction between the child who is being educated for the practical arts and the child who is receiving an academic education. I repeat what I said on the Committee stage—I hope this will not unduly annoy the Solicitor-General—that when we think of the very high wages that can be earned today by a boy or girl leaving school and going into a blind alley occupation we must do everything we can to persuade the parent of the child of practical parts that it is a good thing which will be recognised by the State at once if, instead of allowing the child to drift into a highly paid blind alley occupation, he apprentices the child to one of the skilled trades on which the solution to all the economic difficulties that now confront this country depends.
It may be that instead of doing some of the other things within the Income Tax law during our period of office we might have dealt with this matter. Well, this is one of the opportunities left to right hon. and hon. Gentlemen opposite. This is one of the skeletons in the cupboard, one on the candelabra.
We shall have no objection if they put on this skeleton the flesh and blood which will prove that this country does desire to recognise the part that is played by persons with practical gifts, and to recognise also the sacrifices made by parents who apprentice their children rather than fall into the temptation of letting them earn high wages in blind alley occupations which very often unfit them for more skilled occupations later in life.

Mr. G. R. Mitchison: I went to a university, and if I had ever been apprenticed it was, like the Solicitor-General, as an apprentice in the profession of law. We were both, at one time or another, technically apprenticed to the Benchers of an Inn of Court—of whom he is now one. It is off the point to say somebody else might have done what is now asked, and that because the Opposition did not do it when they had the chance nothing is to be done now.


Surely it is our business—perhaps it is the particular privilege of back benchers occasionally—when we come to the Finance Bill to say that this matter is so obviously wrong that it ought to be remedied at the first opportunity. It is no defence to say that someone else failed to remedy it.
I am getting very tired of the constant sheltering behind this Royal Commission. Yesterday we pointed out to the Financial Secretary and the Solicitor-General that there was a completely archaic, ridiculous bunch of anomalies as regards the qualifications of general commissions, and the defence was that they could not remove that monstrosity because they must await the report of the Royal Commission. Surely there are moments when we might look at the merits of the matter and not simply take refuge behind the alleged misdoings of the Opposition or the statement that a Royal Commission is one day to produce a report.
The substance of the matter is that £26 is obviously quite inadequate. It is certainly not going to cover quite a lot of cases—I was going to say most—in the engineering trade. If that is so, it is not a question of whether the Government are giving a loaf or half a loaf; it is a question whether they are giving enough to serve any useful purpose. What is the use of putting in a limit about a premium if, in fact, it will not cover the great majority of the premiums?

The Solicitor-General: The hon. and learned Gentleman will understand that under the Clause the amount returned by way of premium is not taken into account in assessing the £26.

Mr. Mitchison: I fully understand that, because I read the Clause before speaking. I was just going on to point out that in the kind of case I had in mind—the kind of case that really matters in relation to the argument I am going to submit—it does not by any means follow that any premium is paid at all. I am informed, I think tightly, that there are a very great many cases in this country where no premium is paid and, in general, the practice of paying premiums on an apprenticeship is disappearing. I am glad to hear my hon. Friends confirm that, because they know in the school of experience.
The kind of case I have in mind is exactly that which the right hon. Member for South Shields (Mr. Ede) was putting just now. It was the case of an ordinary intelligent, ambitious and excellent working-class family with a really bright son who wants to learn a trade properly and become not only a skilled worker but ultimately to play some leading part in the industrial life of this country in some capacity or other. I say a leading part; I am not going to minimise the importance of skilled workers, and I should have thought right hon. and hon. Gentlemen opposite knew it very well.
Surely what we are out for now is a career open to the talents. I have not "Britain Strong and Free" here, but if the words are given their ordinary sense, it is just the thing that right hon. and hon. Gentlemen ought to want. They should want a career open to all the talents and a career open not merely in the universities, not merely in the excellent and valuable, but still theoretical education you get there, but in a skilled trade.
11.0 p.m.
The whole point is surely that if that form of education is penalised—for education it is—by comparison with the more theoretical education you get elsewhere, then a decision is being made which will have two effects. First, it will hit our potential supply of skilled workers—leaders in industry, etc. Second, from another point of view, it will induce the intelligent, ambitious working-class young man and his family to go to another kind of education.
Whatever our education deficiencies may or may not be in this country, the most obvious field in which we are deficient at the moment is technological education of just this kind. Look at what happens in America—the favourite model for right hon. and hon. Gentlemen opposite. Go abroad and look at Germany and other countries on the Continent. Can anybody say that we in this country are ahead in the march of technological education, and in the democratic character it should have?
Here is an opportunity, at no colossal cost to the Exchequer, to do what we all know perfectly well is the right thing to do. That is not a bad argument. Secondly, it is an opportunity to do something that will be a real contribution towards the advance of this country in a


field where lately it has shown some tendency to fall behind.

Mr. Frederick Lee: I believe that this is most vital issue. In another place the other day they were discussing the scientific use of our manpower. I tried on one occasion in this House to give point to the fact that we are fast falling behind our competitors in the production of scientists and technologists. I believe that both in the United States and in Switzerland the percentage of the population engaged now in scientific and technological study is far and away greater than in this country.
The Minister for Economic Affairs gave me a reply a few months ago that the proportion was now one in 3,000 in this country, and we know in the United States it is one in 400. There is no future for British industry on such a basis. Again we find that in Britain there are even fewer university graduates who take careers in industry than there are in any other manufacturing country. Yet we propose now to differentiate as between university students and those who are prepared to go on from industry to take a course of a technological and scientific nature.
It is grotesque to ask British industry to produce at a pace which can compete with the United States, Germany or Switzerland unless we are prepared to stop this silly differentiation between apprentices who are trying to learn a skilled craft and then wish to go on and become technologists and scientists and those who wish to engage in some artistic pursuit. I hope that the Chancellor will realise that we are not discussing a mere party political question or a small issue. On issues of this kind will depend whether we can obtain a goodly supply of youngsters with sufficient initiative to put their talents to scientific and technological subjects. Unless we do obtain them it is crazy of the Chancellor to ask for more production in this or any other year.
I know that the point has been made that we on this side of the House should have done more in this direction when we were in office. But no matter what we did or did not do, there is a university population of 85,000 in this country today compared with 50,000 in 1939, and we are entitled to some credit for that fact. The divorcement that has taken place between university graduates and

industry can never be remedied if we perpetuate the conditions which now exist.
It has been pointed out from this side of the House that boys are put into all kinds of blind alley jobs and can earn pretty high wages at an early age. That may be attractive to some parents, but fortunately the majority of parents want to think that their boys are going into an industry that will give them a reasonable and secure future. They believe that upon the quality of production which made this country great in the past will depend the future of British industry. I believe that the Government cannot hope to persuade parents to put their boys into these industries, and indeed they will not do so, unless they can show that they are prepared to help them in the way suggested in the Amendment to the Chancellor's proposed Amendment.
As far as the future of the British economy is concerned, I believe that unless we catch up in the production of scientists and technologists with the United States, Switzerland and Germany, all the appeals to people in industry for more hard work will fail. It is only by creating new ideas and applying them speedily to industry that we can hope to maintain our position in the world.
We are falling behind, and both sides of this House would be well advised to inform the Chancellor that we are not satisfied that the Government are doing enough in this direction. We should tell the Chancellor that he should ask that the Whips be taken off and a vote taken, realising, as we do, that upon the settlement of this issue depnds whether we have that close liaison between scientists and industry which we now need.

Mr. E. Fletcher: I hope that the Chancellor realises the deep feelings on this side of the Committee on this subject, and that he cannot expect the House to be satisfied with the two short speeches which have comprised the Government's contribution to this debate. What is the principle to which the Solicitor-General refers as being so sacrosanct that he cannot deal with it until he gets the report of the Royal Commission? I gather, from what the Solicitor-General said, that he was trying to apologise for the fact that he had not paid attention to what had been said about this matter in Committee. He tried to justify his own


method of introducing this Amendment by saying that that was all he said during the Committee stage that he would do.
He was asked to recognise that there is a very great discrimination in this matter. In fact, there is a double discrimination. On the one hand, there is a discrimination between university graduates and those engaged in full-time academic training, and, on the other hand, the apprentices and those engaged in studying for some trade, profession, or vocation. Why should there be such a discrimination? Is that the principle the Solicitor-General is defending, because that principle is not enshrined in the Bill? It is conceded that both classes of persons following training or engaged in full-time training are entitled to have the child allowance.
There is another discrimination, which seems to be equally anomalous. Why is it that child's allowance is obtainable where a child has an unearned income of £85 a year, but is not obtainable if the child is in receipt of wages up to £85 a year? How does the Solicitor-General attempt—I am not sure that he is following this argument.

The Solicitor-General: I am certainly following the argument. I think it is about the tenth time I have heard it.

Mr. E. Fletcher: Of course, it is a great misfortune that we should have to repeat arguments in order to make the Government understand the seriousness of what we are saying. Not a single argument has been addressed by the Treasury Bench in defence of this double anomaly, which we are seeking to remove. All the Solicitor-General has said is that he did not intend, when he spoke on the Committee stage, to do so, and, then, he says he cannot do anything until he has had a report from the Royal Commission.
He said that he thought the Royal Commission would listen to the arguments put forward tonight and that they might also consider any arguments put forward on the other side of the House. The Solicitor-General knows there are not any arguments on the other side of the House. If there are, we have not heard them. What are the arguments against the merits of this proposal? If there are any such arguments which are

to be put to the Royal Commission, the Solicitor-General ought to tell us what they are.
It is for this House to decide this matter, not the Royal Commission. The Government ought not to attempt to shelter behind the Royal Commission when they know there is not a single argument against this proposal. Here is a very real, deeply-felt injustice. We are not merely seeking to remove it, but are trying to save the Government from what is, viewed from the wider interests of the nation, the very short-sighted, stupid policy of discouraging parents from putting their children as apprentices to a trade, or from articling them to some profession, where they can not only get the benefit of professional training, but also be permitted to earn up to £85 a year without involving them in the loss of the child allowance.
In view of the overwhelming arguments in favour of removal, at once, of this anomaly, I hope we shall not be compelled to divide the House, but that, at this late stage, we shall have an assurance our arguments have been appreciated and will be met.

11.15 p.m.

Mr. Jack Jones: I hope that the Solicitor-General will not say that he has heard my argument for the tenth time, because this is the first time that I have intervened in this debate at all. This is an occasion when all of us should pay great and serious regard to what is said.
I am concerned about this country's survival. Its survival will not depend upon the number of votes which are cast in this Lobby or that. It will depend upon the output of steel and castings in the foundries of Great Britain and the amount of coal that is obtained. One can almost count on two hands the number of apprentices in the foundry trade today. The number is deplorable because parents can now take their sons from school and encourage them to go to jobs at a wage which their fathers would have regarded as fabulous in their young days.
I want to encourage the Government to do something right for once. This argument, "You did not do it," is not an argument at all. I readily admit that there was so much left undone when we were in office because it was impossible


to do everything in six years. Even supermen could not have put everything right in that time. Here is an opportunity to put right the first thing that we left undone. All the other things which we are supposed to have left undone have become worse, not better.
I suggest that the Government have not seriously applied their minds to this problem. They have thought of a number—£13—and they have doubled it—£26. They have thought of something to be taken away in case the Opposition should dare to suggest it, so that it could be left as it was—namely £26. I suggest that £85, which is in the Amendment to the proposed Amendment, is quite insufficient having regard to the cost of clothing that apprentices have to wear, the tools with which they have to equip themselves and the training they have to undergo.
The hon. Member for Aylesbury (Mr. Summers) knows something about the Outward Bound School's activities in this connection. I give the hon. Gentleman credit for the active part that he is playing in this type of work. It is all very well for him to salute, but it would have been better if these things could have

been said 20 years ago. It was not possible to say these things to hon. Members opposite then because they did not do anything about the problem. They had no intention of doing anything. It is only because of Socialist legislation and pressure that anything has been done at all. I would utter a word in passing—leave it alone.

The Solicitor-General should apply himself to this problem. It is not the amount of money that I am concerned with. I am concerned with the effect on parents when the Government say that it is better to let things drift rather than encourage parents, as I was encouraged, to send their sons into a trade and become honoured members of a great industry, the steel industry. It is better to pursue a long-term policy and encourage skilled craftsmen. We are steadily lagging behind. I ask the Government to do for the first time something that will be of real value. It will not save them, but it will help the country.

Question put, "That 'twenty-six,' stand part of the proposed Amendment."

The House divided: Ayes, 225; Noes, 218.

Division No. 172.]
AYES
[11.19 a.m.


Allan, R. A. (Paddington, S.)
Cary, Sir Robert
Grimston, Hon. John (St. Albans)


Alport, C. J. M.
Channon, H.
Grimston, Sir Robert (Westbury)


Amery, Julian (Preston, N.)
Churchill, Rt. Hon. W. S.
Hare, Hon. J. H.


Amory, Heathcoat, (Tiverton)
Clarke, Col. Ralph (East Grinstead)
Harris, Frederic (Croydon, N.)


Anstruther-Gray, Major W. J.
Cole, Norman
Harris, Reader (Heston)


Ashton, H. (Chelmsford)
Conant, Maj. R. J. E.
Harrison, Col. J. H. (Eye)


Assheton, Rt. Hon. R, (Blackburn, W.)
Cooper, Sqn. Ldr. Albert
Harvey, Ian (Harrow, E.)


Astor, Hon. J. J. (Plymouth, Sutton)
Cooper-Key, E. M.
Hay, John


Baldwin, A. E.
Craddock, Beresford (Speithorne)
Heald, Sir Lionel


Banks, Col. C.
Cranborne, Viscount
Heath, Edward


Barber, Anthony
Crookshank, Capt. Rt. Hon. H. F. C
Higgs, J. M. C.


Barlow, Sir John
Crosthwaite-Eyre, Col. O. E.
Hill, Dr. Charles (Luton)


Baxter, A. B.
Crouch, R. F.
Hill, Mrs. E. (Wythenshawe)


Beach, Maj. Hicks
Crowder, Petre (Ruislip—Northwood)
Hinchingbrooke, Viscount


Beamish, Maj. Tufton
Darling, Sir William (Edinburgh, S.)
Hirst, Geoffrey


Bell, Philip (Bolton, E.)
Deedes, W. F.
Holland-Martin, C. J.


Bell, Ronald (Bucks, S.)
Digby, S. Wingfield
Hollis, M. C.


Bennett, F. M. (Reading, N.)
Donaldson, Cmdr. C. E. McA
Hope, Lord John


Bennett, Dr. Reginald (Gosport)
Donner, P. W.
Hopkinson, Rt. Hon. Henry


Bennett, William (Woodside)
Doughty, C. J. A.
Hornsby-Smith, Miss M. P.


Birch, Nigel
Drayson, G. B.
Horobin, I. M.


Bishop, F. P.
Drewe, G.
Horsbrugh, Rt. Hon. Florence


Black, C. W.
Duncan, Capt. J. A. L
Howard, Greville (St. Ives)


Boothby, R. J. G.
Eccles, Rt. Hon. D. M.
Hudson, Sir Austin (Lewisham, N.)


Bossom, A. C.
Eden, Rt. Hon. A.
Hurd, A. R.


Boyd-Carpenter, J. A.
Fell, A.
Hutchinson, Sir Geoffrey (Ilford, N.)


Boyle, Sir Edward
Fisher, Nigel
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Braine, B. R.
Fleetwood-Hesketh, R. F.
Hyde Lt.-Col. H. M.


Bromley-Davenport, Lt.-Col. W. H.
Fletcher-Cooke, C.
Jenkins, Robert (Dulwich)



Foster, John
Johnson, Eric (Blackley)


Brooke, Henry (Hampstead)
Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Jones, A. (Hall Green)


Brooman-White, R. C.
Gage, C. H.
Kaberry, D.


Browne, Jack (Govan)
Galbraith, T. G. D. (Hillhead)
Keeling, Sir Edward


Buchan-Hepburn, Rt. Hon. P. G. T.
Garner-Evans, E. H.
Kerr, H. W. (Cambridge)


Bullard, D. G.
George, Rt. Hon. Maj. G. Lloyd
Lambert, Hon. G.


Burden, F. F. A.
Godber, J. B.
Lambton, Viscount


Butler, Rt. Hon. R. A. (Saffron Walden)
Gomme-Duncan, Col. A.
Lancaster, Col. C. G.


Carr, Robert (Mitcham)
Gough, C. F. H.
Legge-Bourke, Maj. E. A. H.


Carson, Hon. E.
Graham, Sir Fergus
Legh, P. R. (Petersfield)




Lindsay, Martin
Ormsby-Gore, Hon. W. D.
Storey, S.


Linstead, H. N.
Orr, Capt. L. P. S.
Studholme, H. G.


Lloyd, Maj. Guy (Renfrew, E.)
Osborne, C
Summers, G. S.


Lockwood, Lt.-Col. J. C.
Partridge, E
Sutcliffe, H.


Longden, Gilbert (Herts, S.W.)
Peto, Brig. C. H M
Taylor, Charles (Eastbourne)


Lucas, Sir Jocelyn (Portsmouth, S.)
Peyton, J. W. W.
Taylor, William (Bradford, N.)


Lucas, P. B. (Brentford)
Pickthorn, K. W M.
Teeling, W.


Lucas-Tooth, Sir Hugh
Pilkington, Capt R. A
Thomas, Rt. Hon J. P. L. (Hereford)


Lyttelton, Rt. Hon. O.
Pitman, I. J.
Thomas, P. J. M. (Conway)


McAdden, S. J.
Powell, J. Enoch
Thompson, Kenneth (Walton)


Macdonald, Sir Peter (I. of Wight)
Price, Henry (Lewisham, W.)
Thompson, Lt.-Cdr. R. (Croydon, W.)


Macketon, Brig. H. R.
Profumo, J. D.
Thorneycroft, Rt. Hn. Peter (Monmouth)


McKibbin, A. J.
Raikes, H. V.
Thornton-Kemsley, Col C N.


McKie, J. H. (Galloway)
Rayner, Brig. R
Tilney, John


Maclean, Fitzroy
Redmayne, M.
Touche, Sir Gordon


MacLeod, John (Ross and Cromarty)
Remnant, Hon. P.
Tweedsmuir, Lady


Macmillan, Rt. Hon. Harold (Bromley)
Roberts, Peter (Heeley)
Vane, W. M. F.


Macpherson, Maj. Niall (Dumfries)
Robertson, Sir David
Vaughan-Morgan, J. K


Maitland, Patrick (Lanark)
Rodgers, John (Sevenoaks)
Vosper, D. F.


Manningham Buller, Sir R. E.
Roper, Sir Harold
Wakefield, Edward (Derbyshire, W.)


Markham, Major S. F.
Ropner, Col. Sir Leonard
Wakefield, Sir Wavell (Marylebone)


Marples, A. E.
Russell, R. S.
Walker-Smith, D. C


Marshall, Douglas (Bodmin)
Ryder, Capt. R. E. D.
Ward, Hon George (Worcester)


Marshall, Sir Sidney (Sutton)
Salter, Rt. Hon. Sir Arthur
Ward, Miss I. (Tynemouth)


Maudling, H.
Schofield, Lt.-Col W. (Rochdale)
Waterhouse, Capt. Rt. Hon. C.


Maydon, Lt.-Cmdr. S. L. C.
Shepherd, William
Watkinson, H. A.


Medlicott, Brig. F.
Simon, J. E. S. (Middlesbrough, W.)
Webbe, Sir H. (London &amp; Westminster)


Mellor, Sir John
Smiles, Lt.-Col. Sir Walter
Wellwood, W.


Morrison, John (Salisbury)
Smithers, Peter (Winchester)
White, Baker (Canterbury)


Mott-Radclyffe, C. E.
Smithers, Sir Waldron (Orpington)
Williams, Gerald (Tonbridge)


Nabarro, G. D. N.
Soames, Capt. C.
Williams, Sir Herbert (Croydon, E.)


Nicholls, Harmar
Spearman, A. C. M.
Williams, R. Dudley (Exeter)


Nicolson, Nigel (Bournemouth, E.)
Speir, R. M.
Wills, G.


Nield, Basil (Chester)
Spence, H R. (Aberdeenshire, W.)
Wilson, Geoffrey (Truro)


Noble, Cmdr. A. H. P.
Stanley, Capt. Hon Richard
Wood, Hon. R.


Nutting, Anthony
Stevens, G. P.



Odey, G. W.
Stoddart-Scott, Col. M.
TELLERS FOR THE AYES:




Mr. Butcher and Mr. Oakshott.




NOES


Acland, Sir Richard
Davies, Ernest (Enfield, E.)
Holt, A. F


Adams, Richard
Davies, Harold (Leek)
Houghton, Douglas


Albu, A. H.
Davies, Stephen (Merthyr)
Hoy, J. H.


Allen, Scholefield (Crewe)
de Freitas, Geoffrey
Hudson, James (Ealing, N.)


Anderson, Alexander (Motherwell)
Deer, G.
Hughes, Cledwyn (Anglesey)


Attlee, Rt. Hon. C. R.
Delargy, H. J.
Hughes, Emrys (S. Ayrshire)


Awbery, S. S
Dodds, N. N.
Hughes, Hector (Aberdeen, N.)


Bacon, Miss Alice
Donnelly, D. L.
Hynd, H. (Accrington)


Baird, J.
Dugdale, Rt. Hon. John (W. Bromwich)
Hynd, J. B. (Attercliffe)


Barnes, Rt. Hon. A. J
Ede, Rt. Hon. J. C.
Irving, W. J. (Wood Green)


Bellenger, Rt. Hon F J
Edwards, John (Brighouse)
Janner, B.


Bence, C. R.
Evans, Albert (Islington, S.W.)
Jay, Rt. Hon. D. P. T.


Benn, Wedgwood
Evans, Edward (Lowestoft)
Jenkins, R. H. (Stechford)


Benson, G.
Evans, Stanley (Wednesbury)
Johnson, James (Rugby)


Beswick, F.
Ewart, R.
Johnston, Douglas (Paisley)


Bing, G. H. C
Fernyhough, E
Jones, David (Hartlepool)


Blackburn, F.
Field, W. J.
Jones, Frederick Elwyn (West Ham, S.)


Blenkinsop, A.
Finch, H. J.
Jones, Jack (Rotherham)


Blyton, W R
Fletcher, Eric (Islington, E.)
Jones, T. W. (Merioneth)


Boardman, H.
Foot, M. M.
Keenan, W


Bottomley, Rt. Hon A. G.
Forman, J C.
Kenyon, C.


Bowden, H. W.
Fraser, Thomas (Hamilton)
King, Dr H M


Bowen, E. R.
Freeman, John (Watford)
Lee, Frederick (Newton)


Braddock, Mrs. Elizabeth
Freeman, Peter (Newport)
Lever, Leslie (Ardwick)


Brockway, A. F.
Gaitskell, Rt. Hon. H. T. N
Lewis, Arthur


Brook, Dryden (Halifax)
Gibson, C. W.
Lindgren, G. S


Broughton, Dr. A. D. D.
Glanville, James
Logan, D. G.


Brown, Rt. Hon. George (Belper)
Gordon-Walker, Rt Hon. P. C.
McGhee, H. G.


Burton, Miss F E
Greenwood, Anthony (Rossendale)
McGovern, J.


Butler, Herbert (Hackney, S)
Grey, C. F.
McInnes, J.


Callaghan, L. J.
Griffiths, David (Rother Valley)
McKay, John (Wallsend)


Carmichael, J
Griffiths, William (Exchange)
McLeavy, F.


Castle, Mrs. B. A.
Grimond, J.
McNeil, Rt. Hon H


Chapman, W. D.
Hale, Leslie (Oldham, W.)
MacPherson, Malcolm (Stirling)


Chelwynd, G. R
Hall, Rt. Hon. Glenvil (Colne Valley)
Mallalieu, J. P. W (Huddersfield, E.)


Clunie, J.
Hall, John (Gateshead, W.)
Mann, Mrs. Jean


Collick, P. H.
Hamilton, W. W.
Manuel, A. C.


Corbet, Mrs. Freda
Hannan, W.
Marquand, Rt. Hon. H. A


Craddock, George (Bradford, S)
Hargreaves, A.
Mayhew, C. P.


Crossman, R. H. S.
Hayman, F. H.
Mellish, R. J.


Cullen, Mrs. A.
Healey, Denis (Leeds, S.E.)
Mitchison, G. R


Daines, P.
Henderson. Rt. Hon. A. (Rowley Regis)
Moody, A. S.


Dalton, Rt. Hon. H.
Herbison, Miss M.
Morgan, Dr. H. B W


Darling, George (Hillsborough)
Hobson, C. R.
Morley, R.


Davies, A. Edward (Stoke, N.)
Holman, P.
Morris, Percy (Swansea, W.)







Morrison, Rt. Hon. H. (Lewisham, S.)
Roberts, Albert (Normanton)
Thomas, David (Aberdare)


Mort, D. L.
Roberts, Goronwy (Caernarvonshire)
Thomas, George (Cardiff)


Moyle, A.
Robinson, Kenneth (St. Pancras, N.)
Thomas, Iorwerth (Rhondda, W.)


Mulley, F. W
Rogers, George (Kensington, N.)
Ungoed-Thomas, Sir Lynn


Murray, J. D.
Ross, William
Wade, D. W.


Nally, W.
Royle, C.
Watkins, T. E.


Noel-Baker, Rt. Hon P J
Schofield, S. (Barnsley)
Weitzman, D.


Oliver, G. H.
Shinwell, Rt. Hon. E.
Wells, Percy (Faversham)


Orbach, M
Short, E. W.
Wells, William (Walsall)


Oswald, T.
Shurmer, P. L. E.
West, D. G.


Padley, W. E.
Silverman, Julius (Erdington)
Wheatley, Rt. Hon. John


Paling, Rt. Hon. W. (Dearne Valley)
Silverman, Sydney (Nelson)
White, Mrs. Eirene (E. Flint)


Paling, Will T. (Dewsbury)
Simmons, C. J. (Brierley Hill)
Whiteley, Rt. Hon. W.


Pannell, Charles
Slater, J.
Wigg, George


Pargiter, G. A.
Smith, Ellis (Stoke, S.)
Wilkins, W. A.


Paton, J.
Smith, Norman (Nottingham, S.)
Willey, Frederick (Sunderland, N.)


Pearson, A.
Snow, J. W.
Willey, Octavius (Cleveland)


Peart, T. F.
Sorensen, R. W.
Williams, Rev. Llywelyn (Abertillery)


Plummer, Sir Leslie
Soskice, Rt. Hon. Sir Frank
Williams, Ronald (Wigan)


Porter, G.
Sparks, J. A.
Williams, W. R. (Droylsden)


Price, Joseph T. (Westhoughton)
Stewart, Michael (Fulham, E.)
Williams, W. T. (Hammersmith, S.)


Price, Philips (Gloucestershire, W.)
Stokes, Rt. Hon. R. R.
Wilson, Rt. Hon. Harold (Huyton)


Proctor, W. T.
Strachey, Rt. Hon. J.
Winterbottom, Ian (Nottingham, C.)


Pursey, Cmdr. H.
Summerskill, Rt. Hon. E.
Wyatt, W. L.


Rankin, John
Swingter, S. T.
Yates, V. F.


Reid, Thomas (Swindon)
Sylvester, G. O.
Younger, Rt. Hon. K.


Rhodes, H.
Taylor, John (West Lothian)



Robens, Rt. Hon. A.
Taylor, Rt. Hon. Robert (Morpeth)
TELLERS FOR THE NOES:




Mr. Popplewell and Mr. Wallace.

Question again proposed, "That the proposed words be there inserted in the Bill."

11.30 p.m.

Mr. Hugh Gaitskell: I beg to move, "That the debate be now adjourned."
I think that the Chancellor must himself be very anxious and uneasy in view of the Division figures which have just been announced, and it will be to his interest to accept the Motion, owing to the probability of a defeat in the near future. There are other good arguments which will appeal to both sides of the House even more. For example I think the Chancellor will agree that we have made good progress. We have had good debates; there has been no filibustering, and we have kept up the harmony of the proceedings exactly as we did throughout the whole of the Committee stage.
All the same, it is clear that there is still some considerable way to go before we can complete the Report stage and, looking at it in terms of pages, I think I am right in saying that we still have to deal with 19 pages or thereabouts of the Order Paper. I am sure the Chancellor will agree that it is rather unlikely that we shall be able to get through that, even if we sit for many hours. In the circumstances, and in view of the important matters which are still to be discussed, I should have thought that there would be a good deal to be said for adjourning now and for giving us another day or perhaps half a day in order that we may

complete our discussion in an orderly and sensible manner, and so that these important issues should be fully discussed and reported in the Press.
One of our difficulties is that in the early hours of the morning the proceedings are not always reported. The Chancellor may recall that there were some excellent speeches made during the Committee stage which did not get nearly enough publicity. It would be a tragedy if the utterances of my hon. and right hon. Friends and some of the Chancellor's speeches were not fully reported. In those circumstances I hope that he will accept the Motion.
I am sure that we would all agree that he has been pleasant and accommodating throughout the proceedings. I understand that his even temper got a little ruffled not long ago, but he gets over those things—and he is smiling now. Under the circumstances I am sure that he will accept the Motion. After all, this is the hour at which we usually adjourn.

Mr. R. A. Butler: I regret that there can be no question of accepting the Motion of the right hon. Member for Leeds, South (Mr. Gaitskell). As I announced yesterday, it is the Government's intention to finish the Report stage tonight, to whatever hour we sit.
I do not think the task is so formidable as the right hon. Gentleman makes out. He little knows the accommodating nature of some of our proposals, as we continue. In fact, for the last five or


six pages I do not see any matter which need take much time or cause very much controversy and, as we have already taken the Schedule on the Entertainments Duty earlier, that is also eliminated as a subject of discussion. It is not until we come to one or two matters relating to Purchase Tax—which have all been fully discussed before or, if not, have been explained in the debate—that we have any matters of any important substance.
After that there is the new Part III in the Fourth Schedule which, in any case, is totally incomprehensible; so it would be of no great importance whether or not we discussed it. Then we have one or two details to finish up with. Therefore, although the task looks formidable, to an expert it is quite clear that we can get through it without very much trouble.
I would say, further, that as most of these subjects have been exhaustively discussed before in the Committee I cannot imagine that the national Press will be losing an undue amount by missing some of our observations. If they are, I can certainly put the whole of the public relations staff—which has been

severely cut—on to the task of providing facilities to hon. Members if they wish to give a speech to the public which the public might otherwise miss.

In the circumstances, and in the hope that the right hon. Gentleman, with the good temper that he and his hon. Friends have hitherto exhibited, and to which I pay full tribute, will continue in the same spirit of understanding so that we do not take up too much time in discussing those matters which have been exhaustively discussed in Committee, I think we might get through without much trouble. Therefore I regret that we cannot accept the right hon. Gentleman's Motion.

Mr. H. Hynd: If it is the intention to go on through the night, Mr. Deputy-Speaker, will you give instructions for the temperature to be raised, not only in the Chamber but in other parts of the building?

Mr. Deputy-Speaker (Sir Charles MacAndrew): I will give those instructions.

Question put, "That the debate be now adjourned."

The House divided: Ayes, 205; Noes, 221.

Division No. 173.]
AYES
11.35 a.m.


Acland, Sir Richard
Crossman, R. H. S.
Hale, Leslie (Oldham, W.)


Adams, Richard
Cullen, Mrs. A.
Hall, John (Gateshead, W.)


Albu, A. H.
Daines, P.
Hamilton, W. W.


Allen, Scholefield (Crewe)
Dalton, Rt. Hon. H
Hannan, W.


Anderson, Alexander (Motherwell)
Darling, George (Hillsborough)
Hargreaves, A.


Attlee, Rt. Hon. C. R.
Davies, A. Edward (Stoke, N.)
Hayman, F. H.


Awbery, S. S.
Davies, Ernest (Enfield, E.)
Healey, Denis (Leeds, S.E.)


Bacon, Miss Alice
Davies, Harold (Leek)
Henderson, Rt. Hon. A. (Rowley Regis)


Baird, J.
Davies, Stephen (Merthyr)
Herbison, Miss M.


Barnes, Rt. Hon. A. J
de Freitas, Geoffrey
Hobson, C. R.


Bellenger, Rt. Hon. F. J
Deer, G.
Houghton, Douglas


Bence, C. R.
Delargy, H. J.
Hoy, J. H.


Benn, Wedgwood
Dodds, N. N.
Hudson, James (Ealing, N.)


Benson, G.
Donnelly, D. L.
Hughes, Cledwyn (Anglesey)


Beswick, F.
Dugdale, Rt. Hon. John (W. Bromwich)
Hughes, Emrys (S. Ayrshire)


Bing, G. H. C.
Ede, Rt. Hon. J. C.
Hughes, Hector (Aberdeen, N.)


Blackburn, F.
Edwards, John (Brighouse)
Hynd, H. (Accrington)


Blenkinsop, A.
Evans, Albert (Islington, S.W.)
Hynd, J. B. (Attercliffe)


Blyton, W. R.
Evans, Edward (Lowestoft)
Irving, W. J. (Wood Green)


Boardman, H.
Evans, Stanley (Wednesbury)
Janner, B.


Bottomley, Rt. Hon. A. G.
Ewart, R.
Jay, Rt. Hon. D. P. T.


Bowden, H. W.
Fernyhough, E.
Jenkins, R. H. (Stechford)


Braddock, Mrs. Elizabeth
Field, W. J.
Johnson, James (Rugby)


Brockway, A. F.
Finch, H. J.
Johnston, Douglas (Paisley)


Brook, Dryden (Halifax)
Fletcher, Eric (Islington, E.)
Jones, David (Hartlepool)


Broughton, Dr. A. D. D.
Foot, M. M.
Jones, Frederick Elwyn (West Ham, S.)


Brown, Rt. Hon. George (Belper)
Forman, J. C.
Jones, Jack (Rotherham)


Burton, Miss F. E.
Fraser, Thomas (Hamilton)
Jones, T. W. (Merioneth)


Butler, Herbert (Hackney, S.)
Freeman, John (Watford)
Keenan, W.


Callaghan, L. J.
Freeman, Peter (Newport)
King, Dr. H. M.


Carmichael, J.
Gaitskell, Rt. Hon. H. T. N.
Lee, Frederick (Newton)


Castle, Mrs. B. A.
Gibson, C. W.
Lever, Leslie (Ardwick)


Chapman, W. D.
Glanville, James
Lewis, Arthur


Chetwynd, G. R.
Gordon Walker, Rt. Hon. P. C.
Lindgren, G. S.


Clunie, J.
Greenwood, Anthony (Rossendale)
MacColl, J. E.


Colegate, W. A.
Grey, C. F.
McGhee, H. G


Corbet, Mrs. Freda
Gridley, Sir Arnold
McGovern, J.


Craddock, George (Bradford, S.)
Griffiths, William (Exchange)
McInnes, J.




McKay, John (Wallsend)
Plummer, Sir Leslie
Taylor, Rt. Hon. Robert (Morpeth)


McLeavy, F.
Popplewell, E.
Thomas, David (Aberdare)


McNeil, Rt. Hon. H.
Price, Joseph T. (Westhoughton)
Thomas, George (Cardiff)


MacPherson, Malcolm (Stirling)
Price, Philips (Gloucestershire, W.)
Thomas, Iorwerth (Rhondda, W.)


Mallalieu, J. P. W. (Huddersfield, E.)
Proctor, W. T.
Ungoed-Thomas, Sir Lynn


Mann, Mrs. Jean
Rankin, John
Wallace, H. W.


Manuel, A. C.
Reid, Thomas (Swindon)
Watkins, T. E.


Marquand, Rt. Hon. H A
Rhodes, H.
Weitzman, D.


Mayhew, C. P.
Robens, Rt. Hon, A.
Wells, Percy (Faversham)


Mellish, R. J.
Roberts, Albert (Normanton)
Wells, William (Walsall)


Mitchison, G. R.
Roberts, Goronwy (Caernarvonshire)
West, D. G.


Moody, A S.
Rogers, George (Kensington, N.)
Wheatley, Rt. Hon John


Morgan, Dr H B. W
Ross, William
White, Mrs. Eirene (E. Flint)


Morley, R.
Schofield, S. (Barnsley)
Whiteley, Rt. Hon. W.


Morris, Percy (Swansea, W.)
Shinwell, Rt. Hon. E.
Wigg, George


Mori, D. L
Short, E. W.
Wilkins, W. A.


Moyle, A.
Shurmer, P. L. E.
Willey, Frederick (Sunderland, N.)


Mulley, F. W
Silverman, Julius (Erdington)
Willey, Octavius (Cleveland)


Murray, J. D
Simmons, c. J. (Brierley Hill)
Williams, Rev. Llywelyn (Abertillery)


Nally, W.
Slater, J.
Williams, Ronald (Wigan)


Noel-Baker, Rt. Hon P J
Smith, Norman (Nottingham, S.)
Williams, W. R. (Droylesden)


Oliver, G. H.
Snow, J. W
Williams, W. T. (Hammersmith, S.)


Orbach, M.
Sorensen, R. W.
Wilson, Rt. Hon. Harold (Huyton)


Oswald, T.
Soskice, Rt. Hon. Sir Frank
Winterbottom, Ian (Nottingham, C)


Padley, W. E.
Sparks, J. A.
Wyatt, W. L.


Paling, Rt. Hon. W. (Dearne Valley)
Stewart, Michael (Fulham, E.)
Yates, V. F.


Paling, Will T. (Dewsbury)
Stokes, Rt. Hon. R. R.
Younger, Rt. Hon. K.


Pannell, Charles
Strachey, Rt. Hon. J.



Pargiter, G. A.
Summerskill, Rt. Hon. E
TELLERS FOR THE AYES:


Paton, J
Swingler, S. T.
Mr. Royle and


Pearson, A.
Sylvester, G. O.
Mr. Kenneth Robinson.


Peart, T. F.
Taylor, John (West Lothian)





NOES


Allan, R. A. (Paddington, S.)
Crookshank, Capt. Rt. Hon. H. F. C.
Hudson, Sir Austin (Lewisham, N.)


Alport, C. J. M.
Crosthwaite-Eyre, Col. O. E.
Hurd, A. R.


Amery, Julian (Preston, N.)
Crouch, R. F.
Hutchinson, Sir Geoffrey (Ilford, N.)


Amory, Heathcoat (Tiverton)
Crowder, Petre (Ruislip—Northwood)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Anstruther-Gray, Major W. J.
Darling, Sir William (Edinburgh, S.)
Hyde, Lt.-Col. H. M.


Ashton, H. (Chelmsford)
Deedes, W. F.
Jenkins, Robert (Dulwich)


Assheton, Rt. Hon. R. (Blackburn, W.)
Digby, S. Wingfield
Johnson, Eric (Blackley)


Astor, Hon. J. J. (Plymouth, Sutton)
Donaldson, Cmdr. C. E. McA.
Jones, A. (Hall Green)


Baldwin, A. E.
Donner, P. W.
Kaberry, D.


Banks, Col. C.
Doughty, C. J. A
Kerr, H. W. (Cambridge)


Barber, Anthony
Drayson, G. B.
Lambert, Hon. G.


Barlow, Sir John
Drewe, C.
Lambton, Viscount


Exter, A. B.
Duncan, Capt. J. A. L.
Lancaster, Col. C. G.


Beach, Maj. Hicks
Eccles, Rt. Hon. D. M.
Legge-Bourke, Maj. E. A. H.


Beamish, Maj. Tufton
Eden, Rt. Hon. A.
Legh, P. R. (Petersfield)


Bell, Philip (Bolton, E.)
Fell, A.
Lever, Harold (Cheetham)


Bell, Ronald (Bucks, S.)
Fisher, Nigel
Lindsay, Martin


Bennett, F. M. (Reading, N.)
Fleetwood-Hesketh, R. F.
Linstead, H. N.


Bennett, Dr. Reginald (Gosport)
Fletcher-Cooke, C.
Lloyd, Maj. Guy (Renfrew, E.)


Bennett, William (Woodside)
Foster, John
Lockwood, Lt.-Col. J. C.


Birch, Nigel
Gage, C H.
Longden, Gilbert (Herts, S.W.)


Bishop, F. P.
Galbraith, T. G. D. (Hillhead)
Lucas, Sir Jocelyn (Portsmouth, S.)


Black, C. W.
Garner-Evans, E. H.
Lucas, P. B. (Brentford)


Boothby, R. J. G
Godber, J. B.
Lyttelton, Rt. Hon. O.


Bossom, A. C.
Gomme-Duncan, Col. A
McAdden, S. J.


Bowen, E. R.
Gough, C. F. H.
MacAndrew, Col. Sir Charles


Boyd-Carpenter, J A
Graham, Sir Fergus
Macdonald, Sir Peter (I. of Wight)


Boyle, Sir Edward
Grimond, J.
Mackeson, Brig. H. R.


Braine, B. R.
Grimston, Sir Robert (Westbury)
McKibbin, A. J.


Bromley-Davenport, Lt.-Col. W. H.
Hare, Hon. J. H.
McKie, J. H. (Galloway)


Brooke, Henry (Hampstead)
Harris, Frederic (Croydon, N.)
Maclean, Fitzroy


Brooman-White, R. C.
Harris, Reader (Heston)
Macleod, John (Ross and Cromarty)


Browne, Jack (Govan)
Harrison, Col. J. H. (Eye)
Macmillan, Rt. Hon. Harold (Bromley)


Buchan-Hepburn, Rt. Hon. P. G. T.
Harvey, Ian (Harrow, E.)
Macpherson, Maj. Niall (Dumfries)


Bollard, D. G.
Hay, John
Maitland, Patrick (Lanark)


Burden, F. F. A.
Heald, Sir Lionel
Markham, Major S. F.


Butcher, H. W.
Heath, Edward
Marples, A. E.


Butler, Rt. Hon. R. A. (Saffron Walden)
Higgs, J. M. C.
Marshall, Douglas (Bodmin)


Carr, Robert (Mitcham)
Hill, Dr. Charles (Luton)
Marshall, Sir Sidney (Sutton)


Carson, Hon. E.
Hill, Mrs. E. (Wythenshawe)
Maudling, R.


Cary, Sir Robert
Hinchingbrooke, Viscount
Maydon, Lt.-Cmdr. S. L. C.


Channon, H.
Holland-Martin, C. J.
Medlicott, Brig. F


Churchill, Rt. Hon. W. S.
Hollis, M. C.
Mellor, Sir John


Clarke, Col. Ralph (East Grinstead)
Holt, A. F.
Morrison, John (Salisbury)


Cole, Norman
Hope, Lord John
Mott-Radclyffe, C. E.


Conant, Maj. R. J. E.
Hopkinson, Rt. Hon. Henry
Nabarro, G. D. N.


Cooper, Sqn. Ldr. Albert
Hornsby-Smith, Miss M. P.
Nicholls, Harmar


Cooper-Key, E. M
Horobin, I. M.
Nicolson, Nigel (Bournemouth, E.)


Craddock, Beresford (Spelthorne)
Horsbrugh, Rt. Hon. Florence
Nield, Basil (Chester)


Cranborne, Viscount
Howard, Greville (St. Ives)
Noble, Cmdr. A. H. P







Nutting, Anthony
Salter, Rt. Hon. Sir Arthur
Tilney, John


Odey, G. W.
Schofield, Lt. Col. W. (Rochdale)
Touche, Sir Gordon


Ormsby-Gore, Hon W. D
Shepherd, William
Tweedsmuir, Lady


Orr, Capt. L. P. S
Simon, J. E. S. (Middlesbrough, W.)
Vane, W. M. F.


Osborne, C.
Smiles, Lt.-Col. Sir Walter
Vaughan-Morgan, J. K


Partridge, E.
Smithers, Peter (Winchester)
Vosper, D. F.


Peto, Brig. C. H. M.
Soames, Capt. C.
Wade, D. W.


Peyton, J. W. W.
Spearman, A. C. M.
Wakefield, Edward (Derbyshire, W.)


Pickthorn, K. W. M.
Speir, R. M
Wakefield, Sir Wavell (Marylebone)


Pilkington, Capt. R A
Spence, H. R. (Aberdeenshire, W.)
Walker-Smith, D C


Pitman, I. J.
Stanley, Capt. Hon. Richard
Ward, Hon. George (Worcester)


Power, J. Enoch
Stevens, G. P.
Ward, Miss I. (Tynemouth)


Price, Henry (Lewisham, W.)
Stoddart-Scott, Col. M.
Waterhouse, Capt. Rt. Hon. C.


Profumo, J. D.
Storey, S.
Webbe, Sir H. (London &amp; Westminster)


Raikes, H. V.
Summers, G. S.
Wellwood, W.


Rayner, Brig. R.
Sutcliffe, H.
White, Baker (Canterbury)


Redmayne, M.
Taylor, Charles (Eastbourne)
Williams, Gerald (Tonbridge)


Remnant, Hon. P.
Taylor, William (Bradford, N.)
Williams, Sir Herbert (Croydon, E.)


Roberts, Peter (Heeley)
Teeling, W.
Williams, R. Dudley (Exeter)


Robertson, Sir David
Thomas, Rt. Hon. J. P. L. (Hereford)
Wills, G.


Rodgers, John (Sevenoaks)
Thomas, P. J. M. (Conway)
Wilson, Geoffrey (Truro)


Roper, Sir Harold
Thompson, Kenneth (Walton)
Wood, Hon. R.


Ropner, Col. Sir Leonard
Thompson, Lt.-Cdr. R. (Croydon, W.)



Russell, R. S.
Thorneycroft, Rt. Hn Peter (Monmouth)
TELLERS FOR THE NOES:


Ryder, Capt. R. E. D.
Thornton-Kemsley, Col. C. N.
Mr. Studholme and Mr. Oakshott.


Original Question put, and agreed to.

11.45 p.m.

Mr. Houghton: I beg to move, in page 16, line 26, at the end to insert:
(6) In subsection (1) or section two hundred and fourteen of the Income Tax Act, 1952 (which relates to a person taking charge of a widower's or widow's children, or acting as his or her housekeeper) the words "is resident with him for the purposes of having," shall be deleted, and the word "has," substituted, and the words "that he has no female relative of his own or his deceased wife who is able or willing to take such charge or act in any such capacity and," shall be deleted.
I assure the Chancellor of the Exchequer that I shall have no need of the services of his noble Friend the Chancellor of the Duchy of Lancaster, and his newly-acquired trumpeter. This is a speech for the House and not the public. Moreover, my remarks will be more temperate this time than last, if only because on this occasion I shall not have to listen to an arrogant, dehydrated speech from the Solicitor-General before I make my own.
The topic of housekeeping is one that all men approach in a spirit of respect. This Amendment seeks to remedy some of the defects of the law in regard to housekeeper allowance. In 1920, when the housekeeper allowance was introduced into the Income Tax code, the allowance could be granted to a widower who had a female relative of his own or of his deceased wife who was resident with him for the purpose of having the charge and care of any child of his; or, if he could prove that he had no female relative of his own or of his deceased wife who was able or willing to take such charge, some other female person could be employed to undertake it.
One of two things which this Amendment seeks to do is to delete from the Income Tax Act the reference regarding the implied obligation of a female relative to become the housekeeper of a widower when, unhappily, he loses his wife. No such sentiment had a rightful place in an Act of Parliament. It seems to place an implied obligation upon the female relations of a widower or of his deceased wife to go and look after his children. The wording of the Act is,
If the claimant proves … that he has no female relative of his own or of his deceased wife who is able or willing to take such charge. …
It is insulting to a widower to ask him to prove that he has no female relative who is willing or able to undertake the duties of housekeeper and look after his children. Surely, he is free to engage whatever housekeeper he wishes. He may desire not to accept the services, voluntarily offered may be, of a relative of his own—still less, perhaps, a relative of his deceased wife who may be quite willing to become his housekeeper. I do not know what would happen if a widower had to confess that a female relative was willing and able so to act but that he did not desire her services in that capacity.
The other matter with which I seek to deal is a discrepancy in the law with regard to the residence of a housekeeper. The law says that a housekeeper who is a female relative must be resident with the claimant, but in the case of a housekeeper who is employed by the claimant there is no such stipulation. This problem engaged the attention of the Joint Committee of the House of Lords and the House of


Commons that was appointed to consider the consolidation Income Tax Act.
Right hon. and hon. Members who wish to study the technicalities of the problem will find them admirably explained on pages 18–19 of the first Report of the Joint Committee on Consolidation Bills 1951–52. In fact the Joint Committee of the two Houses did consider whether they could remove this difficulty by either inserting the condition of residence for the employed housekeeper or deleting it in the case of the female relative housekeeper. But the Committee decided that whichever they did they might be altering the law. As one noble Lord said, their job was not to remove doubts, but to consolidate them. That was the whole point of the Committee. This particular doubt was well and truly consolidated by being left exactly as it was.
In no single case has this problem been resolved in the courts, although one claim did go some way in that respect. The claimant had a housekeeper whom he engaged to look after his children. She was a married woman who lived in a neighbouring flat which was quite accessible to his apartment. She came early in the morning and went home last thing at night. But in that case she was not resident with the claimant, although the House will agree it was a perfectly reasonable arrangement in present conditions.
It is not easy to get housekeepers to become resident in these days because all domestic help is hard to come by. Moreover many widowers are quite capable of looking after their children after they have been put to bed at night and when they get up in the morning. But in this particular case the claimant did not pursue to the courts the particular point of residence. He argued that she was sufficiently resident to be resident for the purpose of the Act. He lost on that argument. What he should have done was to claim she was not resident and need not be resident, but he was no doubt badly advised by the gentlemen of the legal profession. For all I know he had resort to the advice of the Solicitor-General, but however it was, the matter was not resolved in a way which would remove this doubt from the Act
The Joint Committee of both Houses found no enlightenment in the decision of the court and they took refuge in

consolidating this doubt, just as the right hon. Gentleman in a few moments, will take refuge in further consolidating it. He will say the Royal Commission is sitting, and that this is one of the matters it could properly consider. He is going lo consolidate the doubt by doing nothing. We all know that way of dealing with these difficulties and complexities.
The importance of this matter is that, although in the case of an employed housekeeper, the Act does not say she must be resident, the fact that that doubt has never been resolved leads the Inland Revenue at the moment to refuse an allowance where an employed housekeeper is not resident. They have no authority in my judgment to refuse the allowance where an employed housekeeper is not resident, but so far they have not found a widower rich enough, or rash enough, to go to the courts to test the matter. That is why, in my submission, it is the duty of the House to relieve some unknown taxpayer of the burden and expense of taking this matter to court.
It can easily be done. The Amendment I have moved would revise the Section in the Income Tax Act to read as follows:
If the claimant proves that he is a widower and that for the year of assessment a person, being a female relative of his or of his deceased wife, has the charge and care of any child of his or in the capacity of housekeeper, or that he has employed some other female person for the purpose, he shall, subject as hereinafter provided, be entitled to a deduction …
It makes no condition that he must prove that he has no female relative or that, if he has, she is unwilling or unable to act. It lays upon him no obligation to prove that she is resident with him. The obligation resting upon him would be to prove that the person concerned is a housekeeper. I believe that it is possible for a taxpayer to prove to the satisfaction of the Inland Revenue that he has a female relative as a housekeeper and that although she is not resident she is a housekeeper, looking after the children and doing all the things that a housekeeper would be normally expected to do. I hope that the Chancellor will be able to make some advance towards meeting what I think he would agree is a genuine criticism of the doubt and obscurity of the law.

Mr. Donald Chapman: I beg to second the Amendment.
I am particularly glad to do so because I raised this matter during the Committee stage of the Bill. Unfortunately there was no reply at all from the Government at that time. We have no inkling of what they feel about this Amendment, and therefore we have to move it in the strongest terms possible.
My hon. Friend the Member for Sowerby (Mr. Houghton) referred first to the obscurity of the Clause. I think that he is quite right in saying that the Inland Revenue, and the Treasury for that matter, are quite unjustified in their present interpretation of the Section. If I may paraphrase the Section as it stands, it says first of all that if a widower has a female relative resident with him in order to act as his housekeeper he can claim an allowance.
Then it goes on to say that if he has no relative able and willing to act in such capacity, and he employs someone else, he can also claim the allowance. The obscurity has arisen in the interpretation of the words "such capacity." if he has no female relative able and willing, and he employs someone else in "such capacity," he can claim the allowance, and the words "such capacity" have been held, I suppose, to be related to being a housekeeper and also to being a resident.
I have read the Section so often that I could almost repeat it off by heart. I say that there is no real justification for saying that the word "such" implies the qualification of residence in the case of someone other than a relative. In those circumstances we should be quite justified in asking that the matter be cleared up.
However, there is apparently no doubt in the mind of the Treasury. I wrote to the Chancellor some time ago putting forward a case where this matter came up. The Financial Secretary to the Treasury was good enough to reply. He made it quite clear that he had no doubt at all about the interpretation of the Clause. He said:
As you are no doubt aware, a housekeeper allowance is given to a widower only where he employs a resident housekeeper.
What justification has the Financial Secretary for that remark? It has never been decided in the courts. The Joint Committee preparing the 1952 Consolida-

tion Act declared that it was an obscurity, but the Treasury blithely go on in their parsimonious way interpreting the law as narrowly as they can. It is high time that we cleared up this whole matter.
12 midnight.
In clearing it up we ought also to be careful to administer as much justice as we can. I want to endorse what has been said from this side of the House about the injustice that this Section. as it stands, creates. Should a housekeeper, employed by a widower, have to be resident? That is the first question we have to ask ourselves. The person who is best qualified to look after a widower's children, for example, may be someone with a home of her own. Why, therefore, must she move into his house in order to care for the children?
Secondly, all sorts of problems confront working people in this respect. A man who is unfortunately left a widower may have a house which is not large enough to accommodate a resident housekeeper with a bedroom and, perhaps, another room of her own. Why should that man, with a small house, be penalised in this way, when he cannot accommodate a resident housekeeper?
Furthermore, let us take the example of a block of flats. Why must a woman, who can very well help by housekeeping for a widower in a block of flats, being the tenant of a neighbouring flat, have to move into his flat when it is only one floor up or, perhaps, just across the passage? I can see the argument that the Chancellor will use on this question of residence. He will say, and the Financial Secretary to the Treasury makes it in the letter he wrote me, that if he once took down the barrier of residence in this respect, he would open the doors to a claim for a housekeeper allowance for all domestic help employed by a widower.

Mr. Butler: Mr. Butler indicated assent.

Mr. Chapman: I see the Chancellor nods his head. He is going to say, perhaps, that he cannot accept this Amendment because a widower will then claim that anyone who comes in to dust his front room is a housekeeper and will claim the £50 allowance. There is some force in that argument, but, I do not think it really stands up to examination, if one looks at the figures involved. After all,


what is the allowance being claimed? It is £50 of taxable income. The most a widower can benefit by is £50 at 9s. 6d. in the £, or, more often, much less than that. So the most he is going to benefit by is 10s. 0d. per week.
That is a small enough figure to help re-imburse him for any domestic help, whether it is a fully-employed housekeeper or occasional domestic help, to help him through the week and to look after his home now that he is, unfortunately, left without a wife to do this job for him. If it is only a benefit of 10s. a week to the widower, how can the Chancellor grumble when a man claims this allowance for a help, perhaps, in a marginal case, whom the Chancellor might not regard as wholly a housekeeper? The amount is so trifling, that the present attitude is taking parsimony further than even the Treasury usually goes.
Apart, however, from the question of residence, is the Chancellor's interpretation of the law such that, as it stands, a man has to prove he has no female relatives able and willing to do the job? Certainly, the Section reads like that, and, if it is so, it is rather ridiculous. I can imagine many of my own female relatives whom I would not trust to bring up my own children and instead of whom I would be happy to have someone else. [Interruption.] So long as I do not mention their names, I shall be all right.
The law places an implied obligation upon the widower to prove that he has not got a relative who can do the job. That may have been all right in the 19th century, with the particular ideas of family unity which prevailed in those days, but it does not fit in with modern conditions.
We need the law clarified and its obscurities remedied. We want to clear up the point relating to residence, which seems unjust in its application at the moment, and we want to remove this implied obligation on the widower to prove that he has not got a female relative who can act as his housekeeper. We have tried to put the case as reasonably as possible, and I hope that the Chancellor will meet us in some way.

Mr. R. W. Sorensen: This is a very real human problem, as I am sure the Chancellor will appreciate. The hon.

Member for Northfield (Mr. Chapman) referred to the fact that he knew of an instance of this problem and I am sure most of us know of several instances in our own constituencies. I cannot understand why there is any reluctance to accept the Amendment. There are difficulties to which reference has been made, but other difficulties will remain if the Amendment is not accepted.
There is one aspect to which little reference has been made so far. It may not seem a weighty matter to many people, but we have to judge these matters not as they seem to us but as they seem to other people. A few weeks ago one of my constituents wrote to me in a state of great indignation telling me that he had assumed from a letter he had received—whether from the Inland Revenue or elsewhere I am not quite certain—that he could take some woman into his household with, he said, inevitable assumptions on the part of all the neighbours.
Whether that is correct or not, one can understand that in many working-class homes where there is quite inadequate accommodation, many men have great difficulty in finding room for any suitable female who will look after their children, apart from which, from their standpoint at least, there is a moral objection. Certainly if a man brings into his home some woman shortly after his wife has died, one knows that neighbours start talking. For that reason alone, even if there is accommodation, many a family has to suffer disabilities because the father is unable to get anyone to come in and, therefore, has to do his best to look after the children. The children suffer accordingly.
I frankly admit that there are difficulties, to which reference has been made, but am I wrong in assuming that if a female relative is willing to look after the children, even though she lives apart from the household, her services provide a valid claim for the allowance referred to? In any case I suggest that here is a real human difficulty which the Chancellor should appreciate much more sympathetically than he has done up to now. There is the need of the children to be considered. When a man's wife dies and he is left with the children I know, from the experience of my con-


stituents and others, that he is hard put to it to know what to do.
There are inevitably females in the family who, no doubt, are willing or able to help, but it does not follow that he desires their services or that they would be suitable; but I presume that legally any relative can simply state that she is willing to help, and even if she is not at all acceptable to a man that would rule out any possibility of the man securing the relief to which reference has been made.
I hope the Chancellor will appreciate the great difficulty particularly in working-class homes. It is a real human problem, and I hope that he will consider it sympathetically and will accept the Amendment.

Mr. Janner: I wish to add one or two words as a Member of the Committee that dealt with this particular point when the consolidation Measure was being considered. I do not want to repeat the arguments that have been used about providing the opportunity for a proper person to be engaged to look after children left in this condition, and about the necessity of making a proper allowance for that purpose, but I should like the House to know that we found ourselves in considerable difficulty when discussing this point in the Committee, and that there was definitely a doubt as to whether a court, if it were given the opportunity of deciding a case on this question, would not come to the conclusion that the words suggested in the Amendment really applied, anyhow.
I think the point has been made here that it should not be left to an individual to test this matter in the courts. I think an interpretation should be given to the Act which is, at least, in favour of the person who would receive protection from a court if the court came to the conclusion that residence was not necessary. The learned judge who sat as Chairman of the Committee could not make up his mind as to whether or not a definite decision should be given in the Committee itself, and consequently we were not able to alter this very ambiguous wording, which may mean one tiling or the other with regard to the question of residence.
It is not asking very much of the Chancellor to make it clear that what the present Act says actually means that residence in the case of a housekeeper, in the sense of residence in the case of a relative, does not mean that the housekeeper must reside in the particular premises, but that it really means that the housekeeper who resides outside the premises shall, as the Act stands at present, shall be entitled to assist and the relief granted. There is ambiguity about it, and it would be an act of fairness, I think on the part of the Chancellor if he were to resolve that ambiguity in favour of the taxpayer, and not be cheeseparing about the position.

Mr. Fernyhough: I hope that the Chancellor will heed the pleas of my hon. Friends, because he must realise what a great human problem this is. During the Committee stage I tried to get the Financial Secretary to look at a case which had been brought to my notice only recently. On May Day a young man came to me and told me his wife had died, that he had two children, who were both going to school, and that a person was coming in every morning, getting their breakfast, coming in again and getting their dinner, and seeing them safely tucked in bed at night; and that, although he was paying for this help, the local Inland Revenue officer had told him that because the person doing the work was not residing with him, nothing could be done for him, and that only the House of Commons could effect a remedy.
I want the Chancellor to understand that there are some people who have such a high standard of morality that they do not care for the idea of there being a young woman sleeping in a man's house unless she and the man are married one to the other; and that there are some neighbourhoods that will talk about that sort of thing and probably make wild guesses that may be very untrue and most unlikely, but which, nevertheless, cause great embarrassment and much heart ache to the people concerned. It is the sort of thing that only happens in working-class households and working-class districts. If the children were going to boarding school people would not be concerned at all. The children would be well looked after.
12.15 a.m.
The man to whom I have referred is an engineer, turning out at seven o'clock in the morning, and not getting back until five or six in the evening. I say that it is very mean and contemptible that we do not meet his case; and all the more so when one remembers that the man might have been indifferent to the welfare of his children. He might have been so indifferent that the local authority would have had to take charge of them; and that would have cost the Chancellor much more than if he accepted this Amendment.
Therefore, I do ask that the right hon. Gentleman should try to realise there is real need for this Amendment to be accepted. It would only be doing justice to men who are looking after their motherless children; men who are doing a really grand job, because a man who has lost his wife and is still prepared to make sacrifices for his children should have every possible encouragement from the Government. Yet. the only encouragement which he gets is to be refused the allowance to which he is morally entitled.
Let me tell the Chancellor that it is physically impossible in some of the industrial centres, because of the lack of space, for there to be separate bedrooms for the man, the woman, and the children. I do hope that the right hon. Gentleman is going to be big, generous and human enough to meet the terms of our Amendment.

Mr. Maudling: This Amendment has been moved, seconded, and supported in a series of weighty and interesting speeches, and the hon. Member for Sowerby (Mr. Houghton) was, I think, far too modest in claiming that his was a speech only for the House of Commons; for this is a matter of keen interest to many families throughout the country. The hon. Members for Sowerby (Mr. Houghton) and Northfield (Mr. Chapman) and others put the case very strongly—better than I could, and in so doing, they sometimes anticipated some of my arguments.
One of those arguments is that this is a matter which is being considered by the Royal Commission. Section 214 of the Income Tax Act, 1952, is one of three parts, all dealing roughly with similar circumstances where a woman has died and her children need to be looked after;

and if one is going to alter the conditions of residence in one part, there should be an alteration in the other two. But, perhaps, that is a minor point. It is recommended by hon. Members opposite that the condition of residence should no longer be applied as it has been for a number of years for the grant of these allowances, but I would explain why this Government agree with previous Governments that the residence provisions are right.
The whole conception of these allowances is that they are applied in circumstances where the household has become bereft of the mother. It is based on the idea of family unity—and on that ideal—which I thought the hon. Member for Northfield (Mr. Chapman) rather too easily dismissed as a 19th century conception. That is quite wrong, because it is still a strong and valid one; and the idea is that there should be assistance for a taxpayer who has the aid of a woman who is willing to act as a housekeeper, not just provide the children with their breakfasts, and put them to bed at night; but somebody who is willing to try to give the children the background and comfort that they need.

Mr. Sorensen: Supposing there is a neighbour living next door who puts the children away last thing at night, as is very often the case, and also gives them breakfast first thing in the morning? In what respect is she different from the mother, as far as looking after the household is concerned?

Mr. Maudling: So far as looking after the household is concerned there may not be a great deal of difference; but as far as looking after the children is concerned there is a lot of difference. I am not saying that there is not great strength in the argument for the Amendment. As I said, this question is being considered by the Royal Commission, but at the present moment, while that consideration is in progress, I was putting to the House the arguments—which I think are strong and valid—why Governments, up to the present, have not adopted the suggestion contained in this Amendment.
The whole idea underlying this allowance is that it should provide for some person resident to look after the children. It is true that it does not apply in the case of a widow or widower. They do not have to have children. They get


the allowance anyway. That is an anomaly which was introduced in the Act of 1924, despite the advice of the Royal Commission of 1920, and it is because it is felt to be rather an anomaly that successive Governments have resisted an extension of that particular housekeeper allowance where there are no children.
Now I come to the point about the uncertainty of the law, and whether it is the law that the residence qualification applies to the non-relative housekeeper as it does to the relative who acts as a housekeeper. As has been pointed out by a number of hon. Members in the Consolidation Bill Committee, there are grounds for doubt as to the exact position in law, at the present moment, about the housekeeper who is not a relative.
In these matters the Inland Revenue authorities have a clear and obvious duty to interpret the law according to what appears to them to be the correct interpretation. Until it be shown in the courts that they are wrong it is the belief of the Inland Revenue authorities that the interpretation which they place upon it is the correct one, and that the residence qualification should apply to the non-relative as it applies to the relative.
But if it is true that there is doubt about the matter—and no doubt there is doubt—I would point out that it appears rather to be assumed by the hon. Member for Sowerby (Mr. Houghton) that if the doubt were resolved it would be resolved in the direction he thinks right, whereas if my argument is right—that residence is a proper qualification—it means that if the doubt were resolved it would be resolved in the opposite direction, by making it clear that residence is a proper qualification.

Mr. Janner: In view of the arguments raised by very learned authorities in the debate on the Consolidation Measure, would not the hon. Gentleman say that he ought not to tell the Commissioners that they must put that interpretation upon those words? Will he be good enough to agree with what was said in the course of that debate, that the reason for the non-insertion of those words was the specific one that there was this doubt? Why should that doubt be resolved by the Government against the taxpayer and not in the taxpayer's favour?

Mr. Maudling: The Inland Revenue authorities apply the law as it appears to them to be their duty to apply it, and if the Government consider—as they do at the moment—that residence is a proper qualification, they would certainly not be right in advising the Commissioners to interpret the law in the opposite direction.
I think I am correct in saying that the Chairman of the Consolidation Bill Committee is now Chairman of the Royal Commission, and in his capacity as Chairman of that Commission and with the assistance of his colleagues, he is now considering this question of residence, and if it is right that it should be cleared up surely it is a very good thing to clear it up after we have had the benefit of this particular advice.
Finally, there was the point about the necessity for the taxpayer to show that he has no female relative able and willing to undertake the task of housekeeper. I do not think that is an unreasonable necessity, as some hon. Members seem to think. Incidentally, I think I am right in saying that the words are "able and, "not" able or, "which appear, I think, in the Amendment and were used in the speech of the hon. Member who moved it.
If a taxpayer has a relative able and willing to undertake the task, I do not think it is unreasonable to say that he should look to her first. That is consistent with the underlying principle of this allowance, which has been adopted and continued by Governments, and which is based on the conception of the unity of the family and the priority of the claims of the family unit.
I listened with great care to the sincere arguments put forward from the other side of the House on what is, without doubt, an important problem affecting closely and personally a large number of people. I have tried to indicate the reasons why the Government consider that the condition of residence in both cases is, as we consider, embodied in the existing law, and the reasons why the Government think that this should be continued; but I have also pointed out that this is a matter which is being examined by the Royal Commission. I hope that that will be a crumb of comfort to hon. Members. The Royal Commission is eminently qualified to give an


opinion which will be of assistance to the House. Therefore, 1 would ask the House, while awaiting the Royal Commission's report, not to accept this Amendment.

Mr. Sorensen: May I ask the hon. Gentleman to consider this case. If a widower has assistance from a woman living next door, who looks after his house and children, and, in order that she shall have accommodation, the children are sent to her house while she goes to live in his house, does it follow that he would get relief?

Mr. Maudling: I do not think that in that case the housekeeper would be resident with him.

Hon. Members: She would.

Mr. MacColl: I think the Parliamentary Secretary would find it easier to clear his mind if he looked at this question from the point of view of the children, and not only from the point of the Inland Revenue, or the convenience of the father. The position is that in such a family there has been a disaster, namely, the loss of the mother. What the Government have to decide is, what is best for the children? Is it better for the father to try to keep the home going, and to keep some stability of environment for the children, or to put them into an institution, which may be the only alternative?
I should have thought that the opinion of the Curtis Committee, of the Home Office, of the Report of the Children's Department of the Home Office, of psychologists, and of everyone else, is overwhelmingly that it is the father's duty to keep the home going. If that is his duty, surely it is the duty of the Inland Revenue to try to facilitate the effort which he makes, not for his own comfort or convenience, but for the children.
So long as there are children to be maintained in the family, surely it is the duty of the Inland Revenue to assist him, by an Income Tax concession, to do his duty. The care of the children is affected by whether it is a female relative, who may be temperamentally unsuited to the task, who may have to be brought in for the purpose, or whether it is the motherly woman neighbour. But that is not relevant to this matter, nor whether the per-

son who administers the comfort and care is living next door, or inhabiting an unsatisfactory attic and becoming the object of uncomfortable talk in the neighbourhood.
The Parliamentary Secretary should forget the legal niceties and the danger that there might be abuse and that someone might want to employ a charlady and get some Income Tax relief by doing so. The possible danger in that respect is not nearly as great as the danger to the home through the financial strain on a father in keeping a home going in very difficult circumstances. We should give such a father every assistance that we can.

12.30 a.m.

Mr. Gaitskell: Nobody who has listened to the debate can feel very happy about the present state of this part of the Income Tax law. To begin with, there is the question of interpretation as to whether the qualification about residence applies to the non-relative or not, and on that, with respect to the Parliamentary Secretary, we should like the view of the Solicitor-General.
This is a matter of considerable importance. It has never been decided in the courts, I believe. The case mentioned by my hon. Friend was not argued on this basis; it was simply taken for granted by the person concerned that the Inland Revenue interpretation was correct, although I believe that previously it had always been realised that there was considerable doubt. We ought to have a more authoritative explanation from one of the Law Officers of the Crown.
Even if the Inland Revenue interpretation is correct, it would be generally agreed in the light of the speeches by my hon. Friends that it is a very unsatisfactory state of affairs. It is almost impossible to hold the line that where a widower who has no female relative willing and capable of looking after the children, or where it is not possible without very great difficulty for someone to come in and live with him, he must, if he is to get the allowance, have some other person employed by him actually living in the house. Many examples have been given of how much more convenient it would be in some cases to have the services of another married person who could not live in the house.
We cannot possibly leave the matter there. This is not a point of law; it is a question of policy on which we can reasonably expect the Government to have come to some conclusion of their own. When there are complicated points of law with widespread repercussions it is certainly not an unreasonable answer to say that a Royal Commission is looking into the matter, but this is not quite that type of case. The Parliamentary Secretary did not suggest that anything very disastrous would happen if the Amendment were accepted. I hope we shall have some further explanation from the Solicitor-General and a rather more forthcoming reply from either the Solicitor-General or the Parliamentary Secretary.

The Solicitor-General: In answer to the right hon. Gentleman, there is a decided case on which reliance has been placed for one interpretation. Doubt has been cast on the correctness of the decision by a very eminent legal authority. On matters of this sort opinions of lawyers may well differ, and I should hesitate to express any conclusive view at short notice this evening. Whatever view I expressed, the matter may well soon come before the Commissioners to decide and to interpret after hearing the arguments on both sides. I am sorry that I cannot throw more light on the matter.

Mr. Gaitskell: This is a very strange situation, because the Solicitor-General is now adopting a very modest attitude by saying, "I do not really know what the answer to this is." But the Parliamentary Secretary had no doubt. He was quite clear what the right interpretation was. He even said that it was the Government view and the Inland Revenue view.

Mr. Maudling: I do not think I said that. I said clearly that there is some doubt here, and that while there is doubt it is the duty of the Revenue officers to follow what they consider to be the right interpretation.

Mr. Gaitskell: The hon. Gentleman also referred to the point of view of the Government. Surely one would expect the Government to have some view on it, but I am still in a fog as to what it is. There is a difference of opinion

between the Parliamentary Secretary and the hon. and learned Gentleman. It is difficult for me—I have heard two contrary views. It is right that the Government should clear up this appalling muddle.
If my hon. Friend the Member for Sowerby (Mr. Houghton) decides to press this matter, I shall be very willing to follow him into the Division Lobby.

Mr. E. Fletcher: The House is now in an intolerable position. I support the Amendment but I will not add a word abouts its merits. I gather that the Government are going to resist it. Whatever views may be held about the merits, it is quite unpardonable for the House to leave the section in this state of obscurity. After all, this is a legislative Assembly. It is our duty to make the laws; it is the duty of the public to observe them; and the last thing we can do is allow these important Income Tax provisions to go out in a state in which there is a most considerable doubt about what they mean. It is admitted that there is the greatest doubt and uncertainty about these obscure provisions.
When the Income Tax Acts came to be consolidated the Joint Committee felt unable to resolve the doubt. They said that what it meant was obscure but that it was not their task to come down on one side or the other. Now the Parliamentary Secretary—and I admire his modesty—has not expressed any view on what the words mean, or whether residence is necessary or not in the case of a non-relative housekeeper. For what it is worth, my own view is that it is not necessary for a non-relative housekeeper to be resident. But it is admitted that there is a doubt about it.
The Solicitor-General himself refuses to give any confident opinion; indeed, he made the extraordinary statement that he had not even considered the matter. It is a sorry state of affairs when on a matter of this importance a Law Officer of the Crown not only says he does not know what the answer is but says he has not considered it. That is not good enough. We have a duty to make laws in a clear, precise fashion so that the public can understand what their liabilities are.
There is an even more serious aspect. Two members of the Treasury Bench


have now propounded the extraordinary doctrine that if there is doubt about the meaning of an Income Tax Act it is the duty of the Inland Revenue officers to resolve it in the interests of the Crown. That is an entirely novel doctrine. If there is such a doubt the taxpayer is entitled to the benefit of it.
We cannot allow an Act to go forward about which there is this obscurity. The public must know what the law is and what their duties are. We, as legislators, must resolve the doubt. We have put forward an Amendment that should commend itself on its merits to the common sense of the House. But if the Government take the opposite view of the merits of what we are proposing, they have a duty to resolve the doubt that exists, and to take the courage of their convictions in both hands and say that the residential qualification is essential.
Unless they do that, they are not entitled to pursue this quite indefensible practice of resolving doubts in their own favour—and doing worse—because they now say they leave it to the Income Tax officials, who are only supposed to act under the direction of the Government. Who does take the responsibility of telling the inspectors how they should resolve this doubt? I feel, in view of the very sorry exhibition we have had from the Government benches, that it would be quite indefensible to leave the matter in this extraordinarily unsatisfactory condition.

Mr. Mitchison: I do not wish to go into the merits or construction of this Amendment, but I do not think we can let pass the most remarkable bit of constitutional doctrine I have ever heard in my life put forward by the Parliamentary Secretary. It came to this: here is an admittedly doubtful provision, and in these circumstances it is the duty of the Inland Revenue to do what they think to be right. I have never heard such an extraordinary suggestion. Our duty is to declare what the taxes shall be, and to do it clearly.
The duty of the Inland Revenue is to levy such taxes as they are authorised by us to levy, and no more. They are not set up to be judges of morals for the community. They are neither qualified for the purpose, nor are they likely to carry

it out effectively when they have to reconcile their views on morality with their duty to collect the revenue which is properly due. I can understand that when the Law Officers of the Crown are so wholly incompetent to give consideration to the matter, they might perhaps consult the Archbishop of Canterbury on moral grounds, but they are certainly not qualified to do it themselves.
My hon. Friend the Member for Islington, East (Mr. E. Fletcher) put the matter quite rightly in that, so far as the Constitution is concerned, unless the Inland Revenue are clearly entitled to collect taxes, they must, as a matter of constitutional doctrine and good sound law, give the taxpayer the benefit of the doubt. The Conservative clubs in this country used to be called Constitutional clubs. I do not know if they still are. I did not expect to have to get up at half-past twelve at night and tell the party opposite that they must not do this violence to the British Constitution. It is an intolerable burden upon the Income Tax inspectors and other officials of the Board of Inland Revenue to make them judges of our morality.

12.45 a.m.

Mr. A. Blenkinsop: I certainly had no intention of intervening in this debate, and I should not have done so but for the extraordinary statement we have had from the Front Bench opposite. Like other hon. Members, in my own constituency I have many cases of this kind where there are very strong feelings indeed about the human issues involved.
When we have added to that this extraordinary legal muddle, with which my hon. and learned Friends have dealt so much more ably than I can, I make a further appeal to the Chancellor who, I hope, is even now re-considering the matter. We shall try to give him time to do so. I appeal to him to make this concession on two grounds. The first ground is the human issues that are involved and the real anxiety of everyone on both sides of the House to try and ensure the best possible conditions for the children who are left in these very sad cases.
It is quite intolerable to us that the position should be as it is at present in those cases where so often there is not


accommodation for anyone from outside to be resident in the house. We know that to be true not only in the industrial areas but even in the Macmillan people's house, where in many cases there will be no accommodation available for a female relative. I hope that, having regard to the views expressed in this debate, the Chancellor will agree to accept this Amendment.
Quite apart from that issue, surely after the statements we have had about the legal position it should be perfectly clear—if anything is clear—that our Amendment should be accepted so that at least the House and the country should know how the matter stands. I hope the Chancellor has now been given the opportunity to come away from his discussions and announce to the House that, after all, he is prepared to accept the Amendment.

Mr. James Callaghan: The Chancellor of the Exchequer has heard the whole of this debate. I have been sitting here all the time and so has he. We also have the good fortune to have with us the Foreign Secretary who is generally regarded as the Deputy Prime Minister and who, therefore, no doubt, has considerable authority in his own right on some of these issues.
I appeal to the Chancellor to reconsider what has been said and what he has heard tonight. There is no difference on any side of the House, or any political issue here. My hon. Friend the Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Widnes (Mr. MacColl) put the case extremely effectively.
There is not very much revenue concerned here. The Chancellor will not unbalance his Budget; nor is the drain on our gold reserves going to be increased if he gives this concession. No one will contend that many taxpayers will arrange their affairs, if they are widowers, in such a way that they will not have a housekeeper, if they can get one, to look after their children but will arrange to get one in order to obtain this allowance.
This is a small problem in terms of finance. It cannot mean much in terms of evasion. At any rate, the Parliamentary Secretary to the Ministry of Civil Aviation put forward no point about

evasion. Nor did he speak of any repercussive effect on any other body of taxpayers which might have been a reason for turning down this Amendment. I appeal to the Chancellor to consider this matter again.
It is not good enough to say, "Let the Royal Commission consider it." That might well be an argument if this House had not considered it. After all, it is one of the objects of a Royal Commission to consider things in order to relieve this House of the responsibility of doing so, because we want to talk about other matters. That is not so in this case. The House has considered this matter very fully, and we have spent more time upon it than any Royal Commission is ever likely to spend. The views of the House are pretty clear.
We believe there is a real case for doing something for this comparatively small number of men, who are deprived of a woman to look after their family and who are deprived of the mother of the family, and we cannot resist that Sort of claim unless it can be demonstrated that there are weighty reasons regarding evasion and wide repercussive effects which would upset the economy.
In these circumstances, I hope the Chancellor will consider what has been said on the merits of the matter and that he will not rely on the argument about a Royal Commission. This House is prepared to lay down the law on the matter and say what it ought to be. I hope that the Chancellor will give us the benefit of his views and tell us he is prepared to consider this matter and see if he cannot go some way towards meeting the case.

Mr. R. A. Butler: Those hon. Members who have spoken have closely studied the law, as it stands, under Section 214 of the Income Tax Act, as consolidated in 1952. Therefore, there is no need for me to outline the law. Certain observations have been made on the duties of the Inland Revenue. It is my duty, as Chancellor of the Exchequer, not to let pass the rather vague suggestions made that certain extraordinary things are happening about the manner in which the Inland Revenue are interpreting their duties.
Nothing in the words, which fell from the mouth of the Parliamentary Secretary


to the Ministry of Civil Aviation, can have brought any confusion into this matter. The law, in the Section to which I have referred, is there for everybody to read. If the citizen feels there is any confusion, he has the right of appeal to the General and Special Commissioners. If he is not successful, he has the right of appeal, in point of law, to the High Court.
As the relation between the citizen and the taxpayer and the Inland Revenue should be absolutely above board, and, as there have been difficulties about the rights of the citizen vis-à-vis the Inland Revenue, it is important that I should make a statement about that subject to remove any doubt. The human issue of this particular Amendment——

Mr. Gaitskell: The Solicitor-General told us that he did not really know what the law was. Is that the position? Are the Government completely unaware of what it really means? I should have supposed, if the Inland Revenue had to administer this law, that they would have some view upon it. One would hope that that view would coincide with that of the Government and of the legal advisers of the Government. There is confusion here. If, in fact, the Law Officers of the Crown hold a different view from the Inland Revenue, we are in great difficulty.

Mr. Butler: There is no difficulty at all. The law stands as the law. There is no question of the Government trying to interpret it one way or the other. In so far as the House of Commons has done its work, and the Government have done their work, the law stands to be interpreted in the courts. The right hon. Gentleman knows perfectly well that that is the whole spirit of our constitution.
The position of the Solicitor-General is that there has been a case on this matter; the case of Brown v. Adamson. Even so distinguished a legal luminary as Lord Radcliffe, who I believe is the greatest living expert on Income Tax in this country, and who is a Lord of Appeal, expressed an opinion, in the hearing of the case, that there was some doubt about the manner in which the law had been finally consolidated. That is the point, and so the Solicitor-General is in the company of the greatest living expert on Income Tax law.
I am not an expert on these matters. I am simply an ordinary Minister of the Crown, but, in my view, there is a considerable difficulty in understanding the many anomalies and difficulties which arise over the housekeeper allowance. As the right hon. Gentleman himself said, it is a particularly difficult aspect of the Income Tax law. When the Government had to make up their mind what attitude they would take towards this Amendment they were naturally actuated by exactly the same consideration which arose in my own mind, because I helped to give guidance to the Government in this matter.
It is obvious that as there is a considerable doubt in these matters it is better to allow the Royal Commission to look into this question rather than to try to settle it out of hand. If we were to try and settle this out of hand on the Report stage, with no further stage on which to test the accuracy of our conclusions, we should give to ourselves airs which are not assumed by even greater legal luminaries than ourselves.

Mr. Janner: In the circumstances, as the right hon. Gentleman admits that there is a grave doubt about this matter, and as he must admit that it would be grossly unfair to the taxpayer to be called upon to pay a tax which he is not or might not be obliged to pay, is the right hon. Gentleman prepared to put this money into a suspense account pending a decision of the Royal Commission, or is he prepared to have a test case fought, for which the Government will pay, to enable the matter to be decided in the courts?

Mr. Butler: I cannot go any further in answer to the points raised.

Mr. Janner: It is a serious matter.

Mr. Butler: I agree that it is a serious matter. But the law was in this condition before it was consolidated, from after the first war. Therefore, I do not think the House of Commons need feel that there has been any great dereliction of duty. If there has been a dereliction of duty there has been the period of office of the last Government and of previous Governments since approximately 1920–24, in which this matter could have been dealt with.

Mr. Gaitskell: What about Lord Radcliffe?

Mr. Butler: The position about Lord Radcliffe is very satisfactory because we are very fortunate in having him as the Chairman of the Royal Commission.

Mr. Gaitskell: Did he not make his statement very recently, on the Consolidation Committee, I think it was?

Mr. Butler: He made it at the hearings.

Mr. Gaitskell: That is a very important development.

Mr. Butler: Yes, but that is all the more reason why in the acute consideration given to the Amendment to which the right hon. Gentleman has put his name I thought it would be grossly immodest of me, as there was doubt in this matter, to try to settle it out of hand when the Commission are giving it detailed consideration. Therefore, it is not only with a sense of modesty but also with a sense of common sense and of humanity that we decided to take this course.
I would appeal to the House now to come to a decision on this matter. It was raised at some length in the Committee stage on the Question "That the Clause stand part of the Bill," and we have now had a very useful discussion which, no doubt, will be brought to the attention, in the OFFICIAL REPORT, of those who are to give it further consideration. I would beseech hon. Members not to think that there is an easy solution to this matter. When I was looking into it I was informed that if we departed from the criterion of residence it would be extremely difficult not to give the allowance to those who might be classed in the general category of domestic servants. There are real difficulties in departing from the criterion of residence.
The hon. Member for Leyton (Mr. Sorensen), who often illuminates our debates, referred to the human question of the difficulty of somebody coming to live in somebody else's house. I fully appreciate that. I realise the housing shortage in the country, the shortage of rooms, and so forth, but to decide this matter as a matter of law out of hand, when many of the legal luminaries in the country

regard it as one of the most complicated in the Income Tax law, would be both unreasonable and unwise.
Therefore, I beseech the House not to try and come to an early decision on a matter which has lasted 20 or 30 years in our statute law, and which is now regarded as one of some doubt. I consider that the Royal Commission can give us very valuable advice upon it.

1.0 a.m.

Mr. Jay: It seems to me that the Chancellor has left us in even worse confusion. Let me briefly make a suggestion to him which may help the Government in their difficulty. We are now informed, not merely by my hon. Friend but by the Parliamentary Secretary who so oddly speaks for the Treasury in these matters, and by the Chancellor himself, that there is a doubt about the interpretation of the existing law on this matter. Now, as I understand it, the Royal Commission on Taxation is not mainly considering points of interpretation of the existing law: it is considering points of general taxation policy, which is a totally different matter.
While that Royal Commission sits it is necessary for the Inland Revenue to go on administering the law, and in the course of administering the law, obviously it must follow one interpretation or another. The extraordinary position we have now reached is that though the representatives of the Treasury tonight tell us that there is considerable doubt—which, apparently, they have no intention of trying to resolve in the immediate future—about the interpretation of the law, they are, nevertheless, permitting and sanctioning the Inland Revenue to pursue and implement their own particular interpretation, which makes the confusion even worse.
We are in the situation that, so far from the Treasury Solicitors consulting the Law Officers of the Crown as to whether the interpretation the Inland Revenue is adopting is in fact in accordance with the existing law, we now learn, only by asking the Solicitor-General what is his interpretation of the law, that he has given no thought to the situation whatever. That is what seems to us an extraordinary situation.
Therefore, would it not help the Government if I were to make this sug-


gestion? Is it not the duty of the Ministers responsible to confer together with the legal advisers of the Crown to reach a collective view, within the Government, as to what the present law is on this matter? Could they not do that—not, I agree, in the next five minutes before we come to a decision on this Amendment, but in the immediate future—and give us this assurance tonight, that, having consulted together on this matter—which, we learn, they have not hitherto done—they will, in the first place, inform the House what their considered view is, and, in the second place, ensure that the Inland Revenue follows that view in this matter?

Mr. H. Hynd: I am a little puzzled by the way the Government approach this matter. They seem to be concentrating on trying to interpret the law as it was passed by previous Parliaments. Surely that is not what we are here for tonight? What we are here for is to frame the 1952 Finance Bill, which will be the law from now on—not to try to interpret what past laws may have been. If that is the position, then it seems to me to knock the bottom out of much of the argument we have been listening to for the last hour or so.
The other point that is puzzling me is this insistence on how the courts will interpret what the Act says. With great respect to the courts of this country I would say that the courts are not the ruling body. The High Court of Parliament is the ruling body, and it is the High Court of Parliament which makes the laws, not the law courts of this country; so we should not, in my submission, be so much concerned about the interpretation the courts will place on past Acts of Parliament.
Our job tonight is to lay down in this present Finance Bill the desire of Parliament and how we think Income Tax ought to be collected. It seems to me that the clear desire of the House is along the lines laid down in the Amendment.

In these circumstances I think it is quite wrong for us to concentrate so much on what past Acts have laid down. We ought to be concentrating our minds on having the best form of words to carry out in this Measure the present desires of Parliament.

Mr. Scholefield Allen: This debate has taken a very unfortunate turn, because what I understand is now suggested by the Government is that this House should abrogate its position as a Legislature and hand over to an"overlord"—and this time he is Lord Radcliffe. He is to say what shall be the Income Tax law.
Those of us who practice in the courts have, at times, to tolerate from learned judges criticism of the framing of Acts of Parliament; and those who have had to face this criticism have made our apologies and explanations. Acts framed after alteration in Committee, and then on Report, or after re-committal, may finish with something in not quite so clear a form as is desirable.
Here we are asked by the Government to leave the law in a most obscure position, although the Government ought to have the courage to make it clear, either by accepting the Amendment or saying that the condition of residence applies in one case or does not apply. We, as a legislative body, are completely abrogating our position when we ought to make that position quite clear and not leave it to Her Majesty's learned judges to say," Oh, this is a quite obscure law. Lord Radcliffe says one thing, and the learned Solicitor-General supports him; but Members of the Government say another thing, and it is not known what is meant." Will not the Government give a clear decision?

Question put," That those words be there inserted in the Bill."

The House divided: Ayes, 194; Noes, 204.

Division No. 174.]
AYES
[1.07 a.m.


Acland, Sir Richard
Baird, J.
Blackburn, F.


Adams, Richard
Barnes, Rt. Hon. A. J.
Blenkinsop, A.


Albu, A. H.
Bellenger, Rt. Hon. F. J.
Blyton, W. R.


Allen, Scholefield (Crewe)
Bence, C. R.
Boardman, H.


Anderson, Alexander (Motherwell)
Benn, Wedgwood
Bottomley, Rt. Hon. A. G.


Attlee, Rt. Hon. C. R.
Benson, G.
Bowden, H. W.


Awbery, S. S.
Beswick, F.
Braddock, Mrs. Elizabeth


Bacon, Miss Alice
Bing, G. H. C.
Brockway, A. F.




Brook, Dryden (Halifax)
Henderson, Rt. Hon. A. (Rowley Regis)
Popplewell, E.


Broughton, Dr. A. D. D.
Herbison, Miss M.
Price, Joseph T. (Westhoughton)


Brawn, Rt. Hon. George (Belper)
Hobson, C. R.
Price, Philips (Gloucestershire, W.)


Burton, Miss F. E.
Holt, A. F.
Proctor, W. T.


Butler, Herbert (Hackney, S.)
Houghton, Douglas
Rankin, John


Callaghan, L. J.
Hoy, J. H.
Reid, Thomas (Swindon)


Castle, Mrs. B. A.
Hughes, Cledwyn (Anglesey)
Rhodes, H.


Chapman, W. D.
Hughes, Emrys (S. Ayrshire)
Robens, Rt. Hon. A.


Chetwynd, G. R.
Hughes, Hector (Aberdeen, N.)
Roberts, Albert (Normanton)


Clunie, J.
Hynd, H. (Accrington)
Roberts, Goronwy (Caernarvonshire)


Collick, P. H.
Hynd, J. B. (Attercliffe)
Robinson, Kenneth (St. Pancras, N.)


Corbet, Mrs. Freda
Irving, W. J. (Wood Green)
Rogers, George (Kensington, N.)


Craddock, George (Bradford, S.)
Janner, B.
Ross, William


Crossman, R. H S.
Jay, Rt. Hon. D. P. T.
Schofield, S. (Barnsley)


Dairies, P.
Jenkins, R. H. (Stechford)
Shinwell, Rt. Hon E.


Dalton, Rt. Hon. H
Johnson, James (Rugby)
Short, E. W.


Darling, George (Hillsborough)
Johnston, Douglas (Paisley)
Shurmer, P. L. E.


Davies, A. Edward (Stoke, N.)
Jones, David (Hartlepool)
Silverman, Julius (Erdington)


Davies, Ernest (Enfield, E.)
Jones, Frederick Elwyn (West Ham, S.)
Simmons, C. J. (Brierley Hill)


Davies, Harold (Leek)
Jones, Jack (Rotherham)
Slater, J.


Davies, Stephen (Merthyr)
Jones, T. W. (Merioneth)
Snow, J. W.


de Freitas, Geoffrey
Keenan, W.
Sorensen, R. W.


Deer, G.
King, Dr. H. M.
Soskice, Rt. Hon Sir Frank


Delargy, H. J.
Lee, Frederick (Newton)
Sparks, J. A.


Dodds, N. N.
Lever, Leslie (Ardwick)
Stewart, Michael (Fulham, E.)


Donnelly, D. L.
Lewis, Arthur
Stokes, Rt. Hon. R. R.


Dugdale, Rt. Hon. John (W. Bromwich)
Lindgren, G. S.
Swingler, S. T.


Ede, Rt. Hon. J. C.
MacColl, J. E.
Taylor, John (West Lothian)


Edwards, John (Brighouse)
MoGovern, J.
Taylor, Rt. Hon. Robert (Morpeth)


Evans, Albert (Islington, S.W.)
McInnes, J.
Thomas, David (Aberdare)


Evans, Edward (Lowestoft)
McKay, John (Wallsend)
Thomas, George (Cardiff)


Evans, Stanley (Wednesbury)
McLeavy, F.
Thomas, Iorwerth (Rhondda, W.)


Ewart, R.
MacPherson, Malcolm (Stirling)
Ungoed-Thomas, Sir Lynn


Fernyhough, E.
Mallalieu, J. P. W. (Huddersfield, E.)
Wallace, H. W.


Field, W. J.
Mann, Mrs. Jean
Watkins, T. E.


Finch, H. J.
Manuel, A. C.
Weitzman, D.


Fletcher, Eric (Islington, E.)
Marquand, Rt. Hon. H. A.
Wells, Percy (Faversham)


Foot, M. M.
Mayhew, C. P.
Wells, William (Walsall)


Forman, J C.
Mellish, R. J.
West, D. G.


Fraser, Thomas (Hamilton)
Mitchison, G. R
Wheatley, Rt. Hon. John


Freeman, John (Watford)
Moody, A. S.
White, Mrs. Eirene (E. Flint)


Freeman, Peter (Newport)
Morley, R.
Whiteley, Rt. Hon. W.


Gaitskell, Rt. Hon. H. T. N.
Mort, D. L.
Wigg, George


Gibson, C. W.
Moyle, A.
Willey, Frederick (Sunderland, N.)


Glanville, James
Mulley, F. W.
Willey, Octavius (Cleveland)


Gordon-Walker, Rt. Hon. P. C.
Murray, J. D.
Williams, Rev. Llywelyn (Abertillery)


Greenwood, Anthony (Rossendale)
Nally, W.
Williams, Ronald (Wigan)


Grey, C. F.
Noel-Baker, Rt. Hon. P. J
Williams, W. R. (Droylsden)


Griffiths, David (Rother Valley)
Orbach, M.
Williams, W. T. (Hammersmith, S.)


Griffiths, William (Exchange)
Oswald, T.
Wilson, Rt. Hon. Harold (Huyton)


Grimond, J.
Padley, W. E.
Winterbottom, Ian (Nottingham, C.)


Hale, Leslie (Oldham, W.)
Paling, Will T. (Dewsbury)
Wyatt, W. L.


Hall, John (Gateshead, W.)
Pannell, Charles
Yates, V. F.


Hamilton, W. W.
Pargiter, G. A.
Younger, Rt. Hon. K.


Hannan, W.
Paton, J



Hargreaves, A.
Pearson, A.
TELLERS FOR THE AYES:


Hayman, F. H.
Peart, T. F.
Mr. Royle and Mr. Wilkins.


Healey, Denis (Leeds, S.E.)
Plummer, Sir Leslie





NOES


Allan, R. A. (Paddington, S.)
Boyd-Carpenter, J. A.
Crosthwaite-Eyre, Col. O. E.


Alport, C. J. M.
Boyle, Sir Edward
Crouch, R. F.


Amery, Julian (Preston, N.)
Braine, B. R.
Crowder, Petre (Ruislip—Northwood)


Anstruther-Gray, Major W. J.
Bromley-Davenport, Lt.-Col. W. H.
Darling, Sir William (Edinburgh, S.)


Ashton, H (Chelmsford)
Brooke, Henry (Hampstead)
Deedes, W. F.


Assheton, Rt. Hon. R. (Blackburn, W.)
Brooman-White, R. C.
Digby, S. Wingfield


Astor, Hon. J. J (Plymouth, Sutton)
Browne, Jack (Govan)
Donaldson, Cmdr. C. E. McA.


Baldwin, A E.
Buchan-Hepburn, Rt. Hon. P. G. T.
Doughty, C. J. A.


Banks, Col C.
Bullard, D. G.
Drayson, G. B.


Barber, Anthony
Burden, F. F. A.
Drewe, G.


Barlow, Sir John
Butcher, H. W.
Duncan, J. A. L.


Baxter, A. B.
Butler, Rt. Hon. R. A. (Saffron Walden)
Eccles, Rt. Hon. D. M.


Beach, Maj. Hicks
Carr, Robert (Mitcham)
Eden, Rt. Hon. A


Beamish, Maj. Tufton
Carson, Hon. E.
Fell, A.


Bell, Philip (Bolton, E.)
Cary, Sir Robert
Fisher, Nigel


Bell, Ronald (Bucks, S.)
Channon, H.
Fleetwood-Hesketh, R. F.


Bennett, F. M. (Reading, N.)
Clarke, Col. Ralph (East Grinstead)
Fletcher-Cooke, C.


Bennett, Dr. Reginald (Gosport)
Cole, Norman
Foster, John


Birch, Nigel
Conant, Maj. R. J. E.
Gage, C. H


Bishop, F. P.
Cooper, Sqn. Ldr. Albert
Garner-Evans, E H.


Black, C. W.
Cooper-Key, E. M.
Godber, J. B.


Boothby, R. J. G.
Cranborne, Viscount
Gomme-Duncan, Col. A.


Bossom, A. C.
Crookshank, Capt. Rt. Hon. H. F. C
Gough, C. F. H







Graham, Sir Fergus
McKibbin, A. J.
Salter, Rt. Hon. Sir Arthur


Hare, Hon J. H.
McKie, J. H. (Galloway)
Schofield, Lt.-Col. W. (Rochdale)


Harris, Frederic (Croydon, N.)
Macmillan, Rt. Hon. Harold (Bromley)
Shepherd, William


Harris, Reader (Heston)
Macpherson, Maj. Niall (Dumfries)
Simon, J. E. S. (Middlesbrough, W.)


Harrison, Col. J. H. (Eye)
Maitland, Patrick (Lanark)
Smiles, Lt.-Col. Sir Walter


Harvey, Ian (Harrow, E.)
Manningham-Buller, Sir R. E.
Smithers, Peter (Winchester)


Hay, John
Markham, Major S. F.
Soames, Capt. C.


Heald, Sir Lionel
Marples, A. E.
Speir, R. M.


Heath, Edward
Marshall, Douglas (Bodmin)
Spence, H. R. (Aberdeenshire, W.)


Higgs, J. M. C.
Marshall, Sir Sidney (Sutton)
Stanley, Capt. Hon. Richard


Hill, Dr. Charles (Luton)
Maudling, R.
Stevens, G. P.


Hill, Mrs. E. (Wythenshawe)
Maydon, Lt.-Cmdr. S. L. C.
Storey, S.


Hinchingbrooke, Viscount
Medlicott, Brig. F.
Strauss, Henry (Norwich, S.)


Holland-Martin, C. J
Mellor, Sir John
Studholme, H. G.


Hollis, M. C.
Morrison, John (Salisbury)
Summers, G. S.


Hope, Lord John
Mott-Radclyffe, C. E
Sutcliffe, H.


Hopkinson, Rt. Hon. Henry
Nabarro, G. D. N
Taylor, Charles (Eastbourne)


Hornsby-Smith, Miss M. P.
Nicholls, Harmar
Taylor, William (Bradford, N.)


Horobin, I. M.
Nicholson, Nigel (Bournemouth, E.)
Thomas, Rt. Hon. J. P. L. (Hereford)


Horsbrugh, Rt. Hon. Florence
Nield, Basil (Chester)
Thompson, Kenneth (Walton)


Howard, Greville (St. Ives)
Noble, Cmdr. A. H. P
Thompson, Lt.-Cdr. R. (Croydon, W.)


Hudson, Sir Austin (Lewisham, N.)
Oakshott, H. D.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Hurd, A. R.
Odey, G. W.
Thornton-Kemsley, Col. C. N.


Hutchinson, Sir Geoffrey (Ilford, N.)
Ormsby-Gore, Hon. W. D
Tilney, John


Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Orr, Capt. L. P. S.
Touche, Sir Gordon


Hyde, Lt.-Col. H. M.
Osborne, C.
Tweedsmuir, Lady


Johnson, Eric (Blackley)
Partridge, E.
Vane, W. M. F.


Jones, A. (Hall Green)
Peto, Brig. C. H. M.
Vaughan-Morgan. J K


Kaberry, D.
Peyton, J. W. W.
Wakefield, Edward (Derbyshire, W.)


Kerr, H. W. (Cambridge)
Pickthorn, K. W. M.
Wakefield, Sir Wavell (Marylebone)


Lambert, Hon. G.
Pilkington, Capt. R. A.
Walker-Smith, D. C.


Lambton, Viscount
Pitman, I. J.
Ward, Hon. George (Worcester)


Lancaster, Col. C. G.
Powell, J. Enoch
Ward, Miss I. (Tynemouth)


Legge-Bourke, Maj. E. A. H.
Price, Henry (Lewisham, W.)
Waterhouse, Capt Rt. Hon. C.


Legh, P. R. (Petersfield)
Profumo, J. D.
Webbe, Sir H. (London &amp; Westminster)


Lindsay, Martin
Raikes, H. V.
Wellwood, W.


Linstead, H. N.
Rayner, Brig. R.
White, Baker (Canterbury)


Lloyd, Maj. Guy (Renfrew, E.)
Redmayne, M.
Williams, Gerald (Tonbridge)


Lockwood, Lt.-Col. J. C.
Remnant, Hon. P
Williams, Sir Herbert (Croydon, E.)


Longden, Gilbert (Herts, S.W.)
Roberts, Peter (Heeley)
Williams, R. Dudley (Exeter)


Lucas, Sir Jocelyn (Portsmouth, S.)
Robertson, Sir David
Wills, G.


Lucas, P. B. (Brentford)
Rodgers, John (Sevenoaks)
Wilson, Geoffrey (Truro)


Lucas-Tooth, Sir Hugh
Roper, Sir Harold
Wood, Hon. R.


McAdden, S. J.
Ropner, Col. Sir Leonard
TELLERS FOR THE NOES:


Macdonald, Sir Peter (I. of Wight)
Russell, R. S.
Mr. T. G. D. Galbraith and


Mackeson, Brig. H. R.
Ryder, Capt. R. E. D.
Mr. Vosper.

Clause 18.—(EXPENDITURE BY MINING CONCERNS ON ABORTIVE EXPLORATION.)

1.15 a.m.

The Solicitor-General: I beg to move, in page 21, line 11, after "thereto," to insert
if it is expenditure which is, apart from this section, allowed to be deducted in computing, for the purposes of income tax, the profits or gains of that trade.
In the course of the Committee stage, questions were asked about the application of Clause 18 (2, b). I explained that the purpose of the subsection was to make certain that the same expenditure could not be deducted twice. Doubt was felt whether that emerged clearly from the wording, and this Amendment is a matter of drafting to make clear what the object of the subsection is, and to ensure that the same expenditure cannot be twice deducted.

Amendment agreed to.

Clause 31.—(RELATION OF PROFITS TAX TO INCOME TAX, RATES OF PROFITS TAX, ETC.)

Mr. Albu: I beg to move, in page 34, line 26, to leave out "twenty-two and a half," and to insert "twenty-six and a quarter."
It may be for the convenience of the House to consider at the same time the following Amendment, in page 34, line 28, to leave out "twenty," and to insert "twenty-three and three quarters."
After the good-natured discussion we have had on points of great importance to individuals it will not be possible for me to move this Amendment without, I think, doing what one of my hon. Friends requested should be done, raising the temperature of the House. It is, I fear, impossible to discuss profits and the Profits Tax without causing the temperature to rise. The purpose of the Amendment is to restore the rate of Profits Tax on distributed profits to the


rate at which it stood before the introduction of this Bill, while leaving the rate on undistributed profits at the new rate.
On the Committee stage we had considerable discussion on the levels of Profits Tax on undistributed profits, but I think the Chancellor will agree that most of the arguments were directed to the extraordinary anomalies which he had introduced into the company taxation system by his changes in Profits Tax, combined with the introduction of the Excess Profits Levy. On this occasion I am not going to address my remarks to the arguments then used, but to the question of whether it is desirable to reduce the rate of Profits Tax on undistributed profits.
The Chancellor's proposals would reduce the rate on distributed profits from a net 26¼ per cent. to 22½ per cent., a reduction of 3¾ per cent. This is not the time to make reductions in the deterrents to companies to increase dividend distribution. We are discussing the Bill at a time of extreme difficulty for the country, when great sacrifices are having to be made. In introducing his Budget last year, my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) recognised this and proposed that there should for a period be an actual limitation on the amount of dividends that companies could distribute
The scheme of dividend limitation has been dropped by the Chancellor, although it is true that he has introduced some rather severe and extraordinary taxation by way of the Excess Profits Levy. In the Profits Tax itself he has reduced the deterrent to the distribution of dividends which existed under the old scheme. There are some extraordinary cases where, if one distributes rather more than less, one pays, on the whole, rather less tax, taking the Profits Tax and the Excess Profits Levy together.
We must consider the matter together with all the other changes made in the Bill in the taxation of income. The Chancellor has given relief by way of Income Tax concessions and also by way of concessions to director-controlled companies and to some classes of the business and professional community. Although

he apparently needed the revenue—we cannot accept the argument that the Excess Profits Levy was introduced only for moral reasons; there must be some purpose in raising £100 million in taxation—during the Committee stage he made concessions costing about £28 in a full year.
So very considerable concessions one way or another have been given, at any rate in relation to what the Chancellor thought he ought to raise by way of taxation through Income Tax or company taxation. We have to consider the fact that the concessions have very largely been given at the expense of the lower-paid wage earners by reducing food subsidies and by making charges in the Health Service.
When we consider the level at which company taxation should stand, and particularly the level of distributed profits, we have to ask ourselves whether there is at this moment, or is likely to be in the near future, any justice in an increased distribution to shareholders, or, if we do not consider the question of justice, whether there are any grounds of economic expediency.
On the score of justice to shareholders, I do not deny the right to a fair return on money saved or money risked, but to some extent what is a fair return for savings is a matter very much under the control of the Chancellor. I do not know whether his recent financial operations will attract new and rather inexperienced savers or disgust old savers, the value of whose savings has been severely slashed. That remains to be seen.
That the return recently paid for risk capital, taking into account both dividends and capital appreciation, has been too high I have no doubt whatever, and I base my conclusions on some considerable study of, for instance, the number of companies going into liquidation year by year, the number failing to pay dividends, or the number having capital reduced. Over a large number of years in this country profits have been too high and the return paid for risk capital has been too high.
If we look at the matter as it has more recently been argued by Members opposite, especially when they were on this side of the House—I notice that they are less and less anxious to argue the ques-


tion of return to shareholders on the basis of equity but more and more on the importance of economic expediency—I do not believe that any possible increase received at the present time by ordinary shareholders would greatly increase the supply of savings available for investment as risk capital.
We have to face the fact—I presume the Government, with the exception of a few backwoodsmen accept it—that we are living in an era of increasing social and economic equality, and if there are insufficient savings in private hands available for private investment, particularly risk investment, then the State will have to devise new methods of providing the capital for industry.
I realise that these arguments certainly do not apply to the small minority of new companies, but these companies are generally to be found among the smaller companies, nearly always owner-managed private companies, or, to be more exact, what are technically described as the exempt companies. I would not be against some means being found to distinguish these from public companies for ordinary purposes of taxation.
But when dealing with Profits Tax we are dealing very largely with the public companies that dominate the country's economy, because although there are only 12,000 of them they do something like half the nation's business. Of the private companies, only about 60 per cent. are exempt private companies, and therefore genuine private companies. The rest are subsidiaries of public companies.
It is in the case of public companies that one cannot really argue that the dividends received by the shareholders play any real part as an incentive to efficiency, output, or initiative exercised by the directors and managers. There is therefore no justification at the present time for reducing the Profits Tax on distributed profits. We are not in this Amendment proposing any change in the rate on undistributed profits. But we think that the present time, especially when the Chancellor of the Exchequer is having very great difficulty in his negotiations with the T.U.C. and the trade unions on the question of wages—which is, after all, the other and main form of income in this country—is not the time

to make the change which he has suggested.

Notice taken that 40 Members were not present; House counted, and, 40 Members being present——

1.30 a.m.

Mr. Albu: I was about to thank my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) for securing a rather better audience for my speech, but I have come to the end of my remarks and am about to sit down. I am sure that in future we shall have to find some way of relating our taxation of business and industry more directly to incentive. I am quite certain at the moment it is not right to remove even in a small way deterrents to the increase of distributions by way of dividends from company profits.

Mr. Roy Jenkins: I beg to second the Amendment.
The effect of this and the following Amendment, which we are discussing together, would, as my hon. Friend said, be to allow the Profits Tax on undistributed profits to remain at the new rate but so far as distributed profits are concerned, to put the tax up to what it was before the Finance Bill was introduced. The Chancellor will be familiar with the arguments which we put forward at the Committee stage about the advantages of the Profits Tax as opposed to the Excess Profits Levy.
The difference between us here—and what we are asking the Chancellor specially to turn his mind to on this point—is that, if this Amendment is not accepted, the effect of this will be to reduce the rate of tax on the distributed profits of companies whose profits have not expanded over the standard years.
If they have so expanded, E.P.L. will counter the Profits Tax reduction. If this Amendment is not made, one of the effects of the Finance Bill will be that distributed profits of companies whose profits have not recently been expanded will pay a lower rate of tax after the Finance Bill than they did before. What is the argument for doing that at the present time? That is the point to which I would ask the Chancellor to direct his reply. What is the reason for singling out this class of profits for reduction at the present time?
What is the argument for doing that rather than giving to small companies the incentive for which we asked earlier? What is the argument for doing that as against making all sorts of other concessions, such as the one concerning apprentices, which have been put forward? After all, reducing the rate of tax on distributed profits is quite an important change. I should have thought, in view of the attitude that the Chancellor has taken on other Amendments, he would not have wished to take this new step without waiting to hear the views of the Royal Commission on Taxation. I think it would hardly be courteous to Lord Radcliffe.
A little earlier we were told how fortunate we were to have Lord Radcliffe presiding over the Royal Commission on Taxation, but the right hon. Gentleman should bear in mind that we would not have had him had it not been for the steps taken by the right hon. Gentleman for Leeds, South (Mr. Gaitskell) to see that we really did get an independent Chairman. In view of the attitude which the Chancellor has consistently taken, this is a matter which should be left to the Royal Commission before a decision is taken.
I ask whether at this stage the Government are not prepared to look at this matter again. After all, the Government have shown a willingness to change their minds quite a lot on taxation in this Bill. The hon. Member for Edinburgh, South (Sir W. Darling) said earlier today that he had consistently supported the general design of the Budget in the Finance Bill. That was a difficult thing to do because the general design of the Budget in this Finance Bill has been changing fairly constantly. Before we leave this tax altogether I ask the Chancellor to bring before the House some convincing argument why this particular class of profits should have a lower rate of tax, or else concede our point.

Mr. R. A. Butler: I do not intend to make a long speech, because we have had three or four debates on this matter in Committee. I think it tends to lower the standard of debates in Parliament when we repeat ourselves too often, and I cannot think of any new arguments to adduce in addition to those which I adduced on the Committee stage. I will

do my best to repeat some of the things which I then said.
These Amendments will not touch the undistributed profits or profits put to reserve but in the case of distributed profits they increase the rate from 22½ to 26¼ per cent. The hon. Member for Edmonton (Mr. Albu) said that our policy would reduce the deterrents to people and perhaps not check them in the distribution of larger dividends. That certainly does not represent the showers of criticism that have come my way from many directions.
All the criticism I have heard has been against me for having imposed a further burden upon the profits of industry through the Excess Profits Levy and the Profits Tax. I should have thought that if there were any justification for those criticisms it would be that a considerably heavier burden has been put upon the profits of industry, amounting in total, as a result of the Budget, to between £76 million and £80 million.
Therefore, to those who say that the Budget is not realistic in this matter I would quote that figure, which is eloquent in itself. I should also like to say to some of those who have pointed to the City and said that I have not taken a firm policy towards profits, that I should have liked them to have seen the communications I have received from quarters in which profits are made. They would then realise the pressure under which I have been, and the merit of the course which I have adopted in an effort to be fair to all sections of the community.
Without wishing to go into the matter in too much detail I feel certain that if an examination were made of the effect generally, all sections of the country, whether in organised labour or in industry, would realise that there is a considerable burden on profits at the present time. The hon. Member for Stechford (Mr. Roy Jenkins) asked why we had singled out this method. The answer is that we did not single out this method, because we combined it with the imposition of the Excess Profits Levy. He might have said, "Why not leave the rate of tax on profits, whether distributed or undistributed, as high as before?" In my opinion that would represent a tax burden on industry too high for industry to bear.
I think that we will all agree that it was extremely wise to halve the tax on undistributed profits in relation to the level under the late Administration. The total tax is also now reduced to 22½ per cent. Not only was the E.P.T. in wartime extremely complicated in administration in that it was impossible to disentangle it from Profits Tax, but the combined weight of the two taxes ought not to be more than a certain amount.
The level which we have now reached, in my opinion, is high enough for industry to bear. I think it even offends against the very sensible remarks made by the hon. Member for Edmonton (Mr. Albu), namely, that there should be savings in the hands of industry, which are in themselves a form of national saving and which would, in some ways, obviate the need for so high a Budget surplus because that would be a form of corporate saving. I hope that the House will feel that we have achieved about the right balance between all the interests concerned.

Mr. Roy Jenkins: I appreciate that the taxation burden on distributed profits of a company which is going to pay a good deal of E.P.L. will not be lowered, but will be increased. But, what happens in the case of a company not paying any E.P.L.? The Chancellor must accept responsibility for how his Finance Bill will affect companies in all sorts of positions. Why is it right to give such a company, which will not be paying E.P.L., a concession on its distributed profits?

Mr. Butler: The original plan, before the E.P.L. was amended, was to make the tax on distributed profits even less severe than it is now by a considerable amount. The hon. Gentleman might then have had a case for finding an anomaly between some companies which had not made profits against a standard year and which are very much relieved on the standard tax on distributed profits.
I do not think there are many anomalies in the balance that I have now struck. By and large, there are bound to be anomalies and hard cases, and that is one of the great sorrows of the E.P.L. that nobody introducing it can be absolutely fair. Taking that into consideration, and taking also into consideration the adjustment of distributed profits,

it would be difficult to find a fairer system, although I very much regret that this extra burden has to be put on industry.
The only point left is the one raised by the hon. Member for Stechford, on the question of small companies. On this, we have already raised the minimum in relation to E.P.L. and we have reduced the maximum. In the case of raising the minimum, it would not be possible to go very much further. We have, under that scheme and by other alleviations, attempted to help the small companies. I hope, therefore, that we may come to a decision on this matter.

Mr. Callaghan: We have heard the Chancellor of the Exchequer. We do not agree with him and he has not satisfied us. Unlike him, we think there is a great deal to be said on this question of profits which are being made. I assure him, if his ear is not closely in touch with what is being said in the country, that he should get into touch with his hon. Friends and he will find they are hearing a great deal about profits, and particularly about excess profits, at the present time.
There is one confusion which the Chancellor gets himself into every time he talks about the burden on industry, and it is worth examining. He has just spoken again about extorting a further £80 million from industry and putting a further burden upon it. Arithmetically, of course, that is true, but it will only be true if concerns make greater profits than they made in the standard years. In other words, he is not asking for an extra burden out of the same amount of income. He is asking for an additional share of their excess profits. In what sense can that be true as a burden, in the way the housewife, who is being asked to pay additional prices because of the reduction of the food subsidies, is bearing a burden?
What the Chancellor is doing is what he ought to do; that is, taking out of the additional profits which these people have been making through the high level business activities over the last few years, a share for the Treasury. He has no moral right to stand here and try to pretend—and I am sure he believes it, although it is a measure of the confusion into which he has got himself—that the


sort of burden he is asking companies to bear has any relationship to the sort of burden he is asking the rest of the community to bear.
1.45 a.m.
This £80 million will be derived out of excess profits, additional profits over and above what companies would normally be making. I hope that the Chancellor, in stating his defence in the country and on any future occasions when we have to talk about this, will not put them in the same category as the other classes of the community, all of whom are, by this Budget, being asked to bear some additional burden of some sort. The only two exceptions are limited companies and those people with substantial personal incomes. These are getting relief in this Budget. Practically every other citizen is being asked to bear a higher burden.
I come to another point. The Chancellor says that no other new argument has been advanced in this debate—this side of the House is grateful to my hon. Friends the Members for Edmonton (Mr. Albu) and Stechford (Mr. Roy Jenkins) for their vigorous and well informed speeches—beyond the arguments that we have canvassed and rehearsed during the last three months. Well, I will give the right hon. Gentleman an additional argument. He has been asked to meet the trade unions next week. That is an argument that he might very well consider when he is deciding what to do about the level of the Profits Tax. It is not my task, nor can I attempt, to forecast what they are going to say to him. But I put this general proposition to him, and I feel certain that it will be in their minds whether they express it or not.
The first essential for any Chancellor, if he wants a wage restraint policy, is to have a profits policy, and if there is one thing the Chancellor has not got it is a profits policy. It is because he has not got a profits policy, because he has been blown hither and thither by every wind and gale which emerged from the City of London, that he will find himself in the greatest difficulty when he accedes to the trade union leaders' request next week to meet them.
The right hon. Gentleman says he has been criticised by the City for not doing enough. They have taken a bite out of his pants. He is collecting less money now than he intended to collect. But they have not started on him yet. Let him wait till next year—if he is there. He will find that the City of London will not be content with the sort of concessions that they have got from him on this present scale.
They will be demanding something far different, far more radical and drastic in the way of reductions of taxation. And, of course, he will find himself in the difficulty of being unable to resist them because he will not have either a wages policy or a profits policy with which to confront them. He will have no economic plan that he can place in front of the industrial leaders on both sides of industry to which he can ask them to accede in the best interests of the nation.
This is the biggest condemnation of the Chancellor's Budget. It is one about which, if I may say so with respect, I warned him on the Second Reading of the Finance Bill, when he shook his head in derision when I suggested to him then that he was precipitating substantial wage claims by every organised body of trade unionists. So it has turned out, and so any Chancellor who had considered these economic problems would have known.
I say very strongly to the Chancellor of the Exchequer that we feel that he has thrown overboard here, in this matter of profits and wages, a policy that had stood the country in good stead since the late Sir Stafford Cripps inaugurated it. He has thrown it over with no gain to himself, with loss of prestige to his party and a considerable burden on the country. We shall all pay for his folly and short-sightedness during the months and years that lie ahead.
I conclude with some words that were uttered by the Prime Minister on an earlier occasion. There was then discussed something that was called the National Defence Contribution, which is roughly similar to the Excess Profits Levy. In his own inimitable way—because there had been the same sort of criticism from the same sort of lobby from the same sort of quarter of the


City of London—what the present Prime Minister had to say about that tax was this:
I hope that we shall not have a draggletailed, tattered tax forced through sulky lobbies."—[OFFICIAL REPORT: 1st June, 1937; Vol. 324, c. 897.]
I think I need change only one word. I think that at this time of night it is "sleepy" Lobbies through which the right hon. Gentleman is going to force this tax. He is making a great mistake in forcing it through. He will live to regret it. When we are returned by the people to handle the affairs of the nation we shall ensure that our wages and profits policy bears some resemblance to the needs of the nation.

Mr. Frederick Mulley: I do not think that the Chancellor should be left to feel tonight that he has outdone everyone else in his taxation of profits. We wish he had taxed profits more severely, because it is necessary to consider not only the actual volume of profits but to consider the percentage of the national income that profits represent. We on this side of the House quarrel with the Excess Profits Levy only because it is a clumsy ill-considered and inefficient taxation device. The Chancellor himself has said tonight that it leads to a lot of hard cases. We say the direct type of tax, the Profits Tax, is a much fairer way of doing the job. We all know

that the Excess Profits Levy was considered in a careless moment of wooing the electorate. It has had a turbulent birth.

I want to put one point to the Chancellor. It may well be a reasonable argument to say that there should be a differential between distributed and undistributed profits, but I would put it to the right hon. Gentleman that while the shareholders do not receive by way of dividend distribution their profits in a given year, those profits are accumulating for future dividends or for the enhanced capital value of their shares. That is the effect of profits put to reserve. Wages forgone through restraint of demand for increased wages are, on the other hand, forgone for ever. There is no reserve there for future benefit.

The Chancellor cannot argue that there is exactly the same relation between the taxation of profits and the forgoing of wage increases. There is a fundamental difference, and one which he would do well to bear in mind in his negotiations with the trade unions. He must show that he means that profits shall bear their fair share of the burdens the economic situation makes imperative.

Question put, "That 'twenty-two and a half' stand part of the Bill."

The House divided: Ayes, 204; Noes, 188.

Division No. 175.]
AYES
[1.54 a.m.


Allan, R. A. (Paddington, S.)
Bullard, D. G.
Fleetwood-Hesketh, R. F.


Alport, C. J. M.
Burden, F. F. A.
Fletcher-Cooke, C


Amery, Julian (Preston, N.)
Butcher, H. W.
Foster, John


Anstruther-Gray, Major W J.
Butler, Rt. Hon. R. A. (Saffron Walden)
Gage, C. H.


Ashton, H. (Chelmsford)
Carr, Robert (Mitcham)
Galbraith, T. G. D. (Hillhead)


Assheton, Rt. Hon. R. (Blackburn, W.)
Carson, Hon. E.
Garner-Evans, E. H


Astor, Hon. J. J. (Plymouth, Sutton)
Cary, Sir Robert
Godber, J. B.


Baldwin, A. E.
Channon, H.
Gomme-Duncan, Col A


Banks, Col. C.
Clarke, Col. Ralph (East Grinstead)
Gough, C. F. H.


Barber, Anthony
Cole, Norman
Graham, Sir Fergus


Barlow, Sir John
Conant, Maj. R. J. E.
Grimond, J.


Baxter, A. B.
Cooper, Sqn. Ldr. Albert
Harris, Frederic (Croydon, N.)


Beach, Maj. Hicks
Cooper-Key, E. M.
Harris, Reader (Heston)


Beamish, Maj. Tufton
Cranborne, Viscount
Harrison, Col. J. H. (Eye)


Bell, Philip (Bolton, E.)
Crookshank, Capt. Rt. Hon. H F. C.
Harvey, Ian (Harrow, E.)


Bell, Ronald (Bucks, S.)
Crosthwaite-Eyre, Col. O. E.
Hay, John


Bennett, F. M. (Reading, N.)
Crouch, R. F.
Heald, Sir Lionel


Birch, Nigel
Crowder, Petre (Ruislip—Northwood)
Heath, Edward


Bishop, F. P.
Darling, Sir William (Edinburgh, S)
Higgs, J. M. C.


Black, C. W.
Deedes, W F.
Hill, Dr. Charles (Luton)


Boothby, R. J. G.
Digby, S. Wingfield
Mill, Mrs. E. (Wythenshawe)


Bossom, A. C.
Donaldson, Cmdr. C. E. McA
Hinchingbrooke, Viscount


Boyd-Carpenter, J. A
Doughty, C. J. A.
Holland-Martin, C. J.


Boyle, Sir Edward
Drayson, G. B.
Hollis, M. C.


Braine, B. R.
Drewe, C.
Holt, A. F.


Bromley-Davenport, Lt.-Col. W. H
Duncan, Capt. J. A. L
Hope, Lord John


Brooke, Henry (Hampstead)
Eccles, Rt. Hon. D. M
Hopkinson, Rt. Hon. Henry


Brooman-White, R. C.
Eden, Rt. Hon. A.
Hornsby-Smith, Miss M. P.


Browne, Jack (Govan)
Fell, A.
Horobin, I. M.


Buchan-Hepburn, Rt. Hon. P. G. T
Fisher, Nigel
Horsbrugh, Rt. Hon. Florence




Howard, Greville (St. Ives)
Mellor, Sir John
Speir, R. M.


Hurd, A. R.
Morrison, John (Salisbury)
Spence, H. R. (Aberdeenshire, W.)


Hutchinson, Sir Geoffrey (Ilford, N.)
Mott-Radclyffe, C. E.
Stanley, Capt. Hon. Richard


Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Nabarro, G. D. N.
Stevens, G. P.


Hyde, Lt.-Com. H. M.
Nicholls, Harmar
Storey, S.


Johnson, Erie (Blackley)
Nicolson, Nigel (Bournemouth, E.)
Strauss, Henry (Norwich, S.)


Jones, A. (Hall Green)
Nield, Basil (Chester)
Summers, G. S.


Kaberry, D.
Noble, Cmdr. A. H. P.
Sutcliffe, H.


Kerr, H. W. (Cambridge)
Oakshott, H. D.
Taylor, Charles (Eastbourne)


Lambert, Hon. G.
Odey, G. W.
Taylor, William (Bradford, N.)


Lambton, Viscount
Ormsby-Gore, Hon. W. D.
Thomas, Rt. Hon. J. P. L. (Hereford)


Lancaster, Col. C. G.
Orr, Capt. L. P. S.
Thomas, P. J. M. (Conway)


Legge-Bourke, Maj. E. A. H.
Osborne, C.
Thompson, Kenneth (Walton)


Legh, P. R. (Petersfield)
Partridge, E.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Lindsay, Martin
Peto, Brig. C. H. M.
Thornton-Kemsley, Col. C. N.


Linstead, H. N.
Peyton, J. W. W.
Tilney, John


Lloyd, Maj. Guy (Renfrew, E.)
Pickthorn, K. W. M.
Touche, Sir Gordon


Lookwood, Lt.-Col. J. C.
Pilkington, Capt. R. A.
Tweedsmuir, Lady


Longden, Gilbert (Herts, S.W.)
Pitman, I. J.
Vane, W. M. F.


Lucas, Sir Jocelyn (Portsmouth, S.)
Powell, J. Enoch
Vaughan-Morgan, J. K.


Lucas, P. B. (Brentford)
Price, Henry (Lewisham, W.)
Vosper, D. F.


Lucas-Tooth, Sir Hugh
Profumo, J. D
Wakefield, Edward (Derbyshire, W.)


McAdden, S. J.
Raikes, H. V.
Wakefield, Sir Wavell (Marylebone)


Macdonald, Sir Peter (I. of Wight)
Rayner, Brig. R.
Walker-Smith, D. C.


Mackeson, Brig. H. R.
Redmayne, M.
Ward, Hon. George (Worcester)


McKibbin, A. J.
Remnant, Hon. P.
Ward, Miss I. (Tynemouth)


McKie, J. H. (Galloway)
Roberts, Peter (Heeley)
Waterhouse, Capt. Rt. Hon. C.


Macmillan, Rt. Hon. Harold (Bromley)
Rodgers, John (Sevenoaks)
Webbe, Sir H. (London &amp; Westminster)


Macpherson, Maj. Niall (Dumfries)
Roper, Sir Harold
Wellwood, W.


Maitland, Patrick (Lanark)
Ropner, Col. Sir Leonard
White, Baker (Canterbury)


Manningham-Buller, Sir R. E.
Russell, R. S.
Williams, Gerald (Tonbridge)


Markham, Major S. F.
Ryder, Capt. R. E. D.
Williams, Sir Herbert (Croydon, E.)


Marples, A. E.
Salter, Rt. Hon. Sir Arthur
Williams, R. Dudley (Exeter)


Marshall, Douglas (Bodmin)
Schofield, Lt.-Col. W. (Rochdale)
Wills, G.


Marshall, Sir Sidney (Sutton)
Shepherd, William
Wilson, Geoffrey (Truro)


Maude, Angus
Simon, J. E. S. (Middlesbrough, W.)
Wood, Hon. R.


Maudling, R.
Smiles, Lt.-Col. Sir Walter



Maydon, Lt.-Cmdr. S. L. C.
Smithers, Peter (Winchester)
TELLERS FOR THE AYES:


Medlicott, Brigadier F.
Soames, Capt. C.
Mr. Studholme and




Mr. Richard Thompson.




NOES


Acland, Sir Richard
de Freitas, Geoffrey
Hughes, Cledwyn (Anglesey)


Adams, Richard
Deer, G.
Hughes, Emrys (S. Ayrshire)


Albu, A. H.
Delargy, H. J.
Hughes, Hector (Aberdeen, N.)


Allen, Scholefield (Crewe)
Dodds, N. N.
Hynd, H. (Accrington)


Attlee, Rt. Hon. C. R.
Donnelly, D. L.
Hynd, J. B. (Attercliffe)


Awbery, S. S.
Dugdale, Rt. Hon. John (W. Bromwich)
Irving, W. J. (Wood Green)


Bacon, Miss Alice
Ede, Rt. Hon. J. C
Janner, B.


Baird, J.
Edwards, John (Brighouse)
Jay, Rt. Hon. D. P. T.


Barnes, Rt. Hon. A. J.
Evans, Albert (Islington, S.W.)
Jenkins, R. H. (Stechford)


Bence, C. R.
Evans, Edward (Lowestoft)
Johnston, Douglas (Paisley)


Bonn, Wedgwood
Evans, Stanley (Wednesbury)
Jones, David (Hartlepool)


Benson, G.
Ewart, R.
Jones, Frederick Elwyn (West Ham, S.)


Beswick, F.
Fernyhough, E.
Jones, Jack (Rotherham)


Bing, G. H. C.
Field, W. J.
Jones, T. W. (Merioneth)


Blackburn, F.
Finch, H. J.
Keenan, W.


Blenkinsop, A.
Fletcher, Eric (Islington, E.)
King, Dr. H. M.


Blyton, W. R.
Foot, M. M.
Lee, Frederick (Newton)


Boardman, H.
Ferman, J. C.
Lever, Leslie (Ardwick)


Bottomley, Rt. Hon. A. G.
Fraser, Thomas (Hamilton)
Lewis, Arthur


Braddock, Mrs. Elizabeth
Freeman, John (Watford)
Lindgren, G. S.


Brockway, A. F.
Freeman, Peter (Newport)
MacColl, J. E.


Brook, Dryden (Halifax)
Gaitskell, Rt. Hon. H. T. N.
McGovern, J.


Broughton, Dr. A. D. D.
Gibson, C. W.
McInnes, J.


Brown, Rt Hon. George (Belper)
Glanville, James
McKay, John (Wallsend)


Burton, Miss F. E.
Gordon Walker, Rt. Hon. P. C.
McLeavy, F.


Butler, Herbert (Hackney, S)
Greenwood, Anthony (Rossendale)
MacPherson, Malcolm (Stirling)


Callaghan, L. J.
Grey, C. F.
Mallalieu, J. P. W. (Huddersfield, E.)


Castle, Mrs. B. A.
Griffiths, David (Rother Valley)
Mann, Mrs. Jean


Chapman, W. D.
Griffiths, William (Exchange)
Manuel, A. C.


Chetwynd, G. R.
Hale, Leslie (Oldham, W.)
Marquand, Rt. Hon. H. A.


Clunie, J.
Hall, John (Gateshead, W.)
Mayhew, C. P.


Collick, P. H.
Hamilton, W. W.
Mellish, R. J.


Corbet, Mrs. Freda
Hannan, W.
Mitchison, G. R.


Graddock, George (Bradford, S.)
Hargreaves, A.
Moody, A. S.


Crossman, R. H. S.
Hayman, F. H.
Morley, R.


Daines, P.
Healey, Denis (Leeds, S.E.)
Mort, D. L.


Dalton, Rt. Hon. H.
Henderson, Rt. Hon. A. (Rowley Regis)
Moyle, A.


Darling, George (Hillsborough)
Herbison, Miss M.
Mulley, F. W.


Davies, A. Edward (Stoke, N.)
Hobson, C. R.
Murray, J. D.


Davies, Ernest (Enfield, E.)
Houghton, Douglas
Nally, W.


Davies, Harold (Leek)
Hoy, J. H.
Noel-Baker, Rt. Hon. P. J


Davies, Stephen (Merthyr)
Hudson, James (Ealing, N.)
Orbach, M.







Oswald, T.
Schofield, S. (Barnsley)
Wells, Percy (Faversham)


Padley, W. E.
Shinwell, Rt. Hon. E.
Wells, William (Walsall)


Paling, Will T. (Dewsbury)
Short, E. W.
West, D. G.


Pannell, Charles
Shurmer, P. L. E.
Wheatley, Rt. Hon. John


Pargiter, G. A.
Silverman, Julius (Erdington)
White, Mrs. Eirene (E. Flint)


Paton, J.
Simmons, C. J, (Brierley Hill)
Whiteley, Rt. Hon. W.


Pearson, A.
Slater, J.
Wilkins, W. A.


Plummer, Sir Leslie
Snow, J. W.
Willey, Frederick (Sunderland, N.)


Popplewell, E.
Sorensen, R. W.
Willey, Octavius (Cleveland)


Price, Joseph T. (Westhoughton)
Soskice, Rt. Hon. Sir Frank
Williams, Rev. Llywelyn (Abertillery)


Price, Philips (Gloucestershire, W.)
Sparks, J. A.
Williams, Ronald (Wigan)


Procter, W. T.
Stewart, Michael (Fulham, E.)
Williams, W. R. (Droylsden)


Rankin, John
Swingler, S. T.
Williams, W. T. (Hammersmith, S.)


Reid, Thomas (Swindon)
Taylor, John (West Lothian)
Wilson, Rt. Hon. Harold (Huyton)


Rhodes, H.
Taylor, Rt. Hon. Robert (Morpeth)
Winterbottom, Ian (Nottingham, C.)


Roberts, Rt. Hon. A.
Thomas, David (Aberdare)
Wyatt, W. L.


Roberts, Albert (Normanton)
Thomas, George (Cardiff)
Yates, V. F.


Roberts, Goronwy (Caernarvonshire)
Thomas, Iorwerth (Rhondda, W.)
Younger, Rt. Hon. K


Robinson, Kenneth (St. Pancras, N.)
Ungoed-Thomas, Sir Lynn



Rogers, George (Kensington, N.)
Wallace, H. W.
TELLERS FOR THE NOES:


Ross, William
Watkins, T. E.
Mr. Bowden and Mr. Wigg.


Royle, C.
Weitzman, D.

Clause 44.—(ASCERTAINMENT OF UNDISTRIBUTED PROFITS AND OVER-DISTRIBUTIONS OF PROFITS FOR EXCESS PROFITS LEVY PURPOSES.)

Mr. Maudling: I beg to move, in page 51, line 2, to leave out from "period," to the end of line 4, and to insert:
if the apportionment made in its case under subsection (2) of the last preceding section is made in proportion to the number of months or fractions of months in the respective parts thereof.
This Amendment is consequential. It follows upon the Amendment made, on re-committal, to Clause 43, whereby a company has the right to require the assessment of its profits to be based on its actual profits for a broken period when proper accounts for that period are available.

Amendment agreed to.

Clause 45.—(EFFECT OF TRANSFERS OF GOING CONCERNS ON STANDARD PROFITS AND COMPUTATION OF PROFITS AND LOSSES.)

Mr. G. P. Stevens (Portsmouth, Langstone): I beg to move, in page 51, line 39, to leave out from "corporate," to "subsection," in line 5, page 52.
Very briefly, the effect of Clause 45 is that if, after 1st January, 1947, the business of a sole trader or partnership is transferred to a body corporate the transferee or body corporate will not succeed to the profits standard unless it is controlled by the same sole trader or partnership from which it has taken the transfer, or by the family, heirs or executors of the transferee, partnership or sole trader.
It seems to me that there is some anomaly here. If one body corporate

accepts from another body corporate, even though the shareholders of one are different from those of the other, the transferee body corporate will take over the profits standard of the transferor body corporate. In the Committee stage we discussed this matter on Clause 41 of the then Bill, and the Solicitor-General, replying to a point which I had raised, said that to arrive at the profits standard of an individual it might be necessary to go into the private affairs of that individual.
The Income Tax assessments of profits in regard to partnerships are calculated on the same principles as those of limited companies, and the difficulties which the Solicitor-General suggested were more imaginary than real. I hope that he has been able to look at the point again and can now accept my Amendment.

Major Guy Lloyd: I beg to second the Amendment.
I wish to support my hon. Friend in this matter as I did on the Committee stage. I can understand why hon. Members opposite do not understand the intricate matters involved. I am certain that my right hon. Friend does, and that he is only waiting for an opportunity to make a favourable comment upon our suggestion. In "The Times Supplement" the other day I read that the only blot left on the Finance Bill was the failure of the Government to concede the point which we have put forward.

The Solicitor-General: I am sorry, but I do not understand why my hon. Friend should feel optimistic about the reception of this Amendment, because when it was moved on the Committee stage I


endeavoured to give the reasons why the Government could not accept it. On that occasion I held out no hope that after further consideration this Amendment might be accepted.
In this Clause we are dealing with the acquisition of a business by a company from an individual or individuals. That raises certain difficulties, because an individual and a partnership will not have an excess profits standard. To try to arrive at the right standard on transfer means that a great deal of investigation may have to take place into the private affairs of individuals, and these private affairs might be disclosed to the acquiring company.
It is because of these difficulties that application of this Clause is limited, in cases where the transfer is to a company from individuals, to that part of the Clause which my hon. Friend is now seeking to remove. I am sorry that I cannot meet my hon. Friends upon this point, and I hope that they will now be satisfied by the repetition of the argument which I advanced on the Committee stage.

Mr. Mitchison: Will the Solicitor-General agree that what he has just said clearly indicates that his two hon. Friends, after accusing the Opposition of not understanding the matter, did not themselves understand it?

Mr. Stevens: I am sorry that my hon. and learned Friend has been unable to accept the Amendment, but, in view of the cogent reasons which he has given, and the way in which they have been received by the House, I beg to ask leave to withdraw the Amendment.

Hon. Members: No.

Amendment negatived.

The Solicitor-General: I beg to move, in line 18, at the end, to insert:
and references to an individual by whom a trade or business is carried on shall be construed, in relation to a trade or business carried on by an individual on behalf of another individual, as including references to the individual on whose behalf it is carried on.
This is a drafting Amendment which seeks to implement a promise given by me during the Committee stage to my hon. Friend the Member for Langstone (Mr. Stevens). It is intended to cover

the case where the individual on whose behalf the business was carried on prior to the transfer was a minor or an incapacitated person.

Amendment agreed to.

Clause 52.—(METAL MINES AND OIL WELLS.)

Mr. Mitchison: I beg to move, in page 57, line 35, to leave out "of metal."

Mr. Deputy-Speaker: It will probably be for the convenience of the House to discuss with this Amendment the next four Amendments in the name of the Chancellor of the Exchequer—

In line 35, after the second "of." to insert "coal or."

In line 35, after "wells," to insert" or asbestos."

In line 43, to leave out "Provided that," and to insert:
(2) The Board of Referees may, on an application made in that behalf, by order direct, as respects a source of mineral deposits of a wasting nature of any kind other than those mentioned in the preceding subsection, that where a body corporate's trade or business consists of or includes the working of such a source, each of the percentages referred to in the provisions mentioned in the preceding subsection shall be deemed to be increased to such extent, not being more than six per cent., as the Board think necessary having regard to the extent to which, by reason of the wasting nature of the source, the benefit of capital expenditure incurred in that trade or business may be exhausted at a greater rate than in the case of other classes of trades or businesses.
(3).

In line 44, to leave out "the source," and to insert:
such a source as is mentioned in the preceding provisions of this section.

Mr. Mitchison: The original Clause gave certain additional percentages in cases where a body corporate's trade or business consisted of or included the working of any source of mineral deposits consisting of mines of metal or oil wells. When the matter was raised during the Committee stage a number of cases were put to the Chancellor in which there appeared to be an exactly similar claim on the ground that they were also cases of the mining of wasting materials. It was pointed out that the reference to "wasting materials" was irrelevant because any mining must necessarily be of wasting materials.
2.15 a.m.
The instances given were coal and asbestos, which now appear in the Chancellor's Amendments, and also industrial diamonds, which was urged by the hon. Member for Altrincham and Sale (Mr. Enroll). Consideration of these matters was promised, and the suggestion was made that that did not cover the whole question. The substance of the matter is that where there is a rate of wasting greater than that in the working of ordinary plant or machinery in any factory, as there is almost inevitably in any mine, coupled with the additional factor that there is an absolute wastage—that which is mined is taken out of the ground and disappears once and for all—then there is some claim to relief. I can think of no exception to that.
That is quite clearly recognised not only in the Millard Tucker Report, which was of course not dealing directly with this tax but with the general question of taxing wasting assets of this kind, but also in the Income Tax legislation itself, which provides for special relief in annual allowances in dealing with mines and oil wells. There is no special preference given to metals, and when the matter came to be considered by the Millard Tucker Committee there was no special preference given to metals. It was recognised that any mining involves this question of wasting assets, that any oil well involves exactly the same question, and that there could be no real distinction.
All of us on this side of the House recognise that what is now proposed by the Chancellor's longer Amendment—that referring to the Board of Referees having a discretion, on evidence, to give relief not exceeding that given in the cases specified in the Bill—is a concession of some value that goes some way to meet the points put forward. But we repeat the Amendment put down originally in the name of the hon. Member for Altrincham and Sale to make the concession cover all cases of mines to the same extent.
Let me give our reasons for still preferring that Amendment, while feeling grateful for the concession made as regards the Board of Referees, so far as it goes. First, it is much simpler; second, it is in line with Income Tax legislation as regards mines, oil wells, etc., and

annual allowances; third, it is in line with the treatment of the matter by the Millard Tucker Committee. Lastly, speaking for myself, I feel some doubt about the Board of Referees.
I know that the Board have a statutory existence. They have certain functions under the Income Tax Acts, and we were told that as regards the rather similar point under the Excess Profits Duty they had considered some cases. But do they meet often? Who are they? They have no statutory qualification except, so far as I know, independence and appointment by the Treasury. I am told that in practice they are independent businessmen and are set up to decide on these matters. I should like to know how active their proceedings are and why this particular duty is to be entrusted to them rather than to any other of the bodies concerned in adjudicating upon Income Tax questions.
I have an uneasy suspicion that what we may be trusting this somewhat important matter to, under the Chancellor's Amendment, could be not unfairly described as a board of dodoes who are defunct for most other purposes. I am all for dodoes in their proper place, but I do not want to revive those extinct birds when there are already a great many competent fowl engaged on Income Tax questions.
We are told the great merit of this Budget is its simplicity. Well, it is late at night to make any general comment about that, and it would undoubtedly be out of order, but really matters have reached such a stage that it would be better not to introduce any further complication unless it is really necessary to do so.
When I look at what I hope I may quite politely call—because after all these gentlemen do not actually exist until they are appointed—the"Board of Dodoes," I am very puzzled as to what exactly they are to do when they have to decide the question which the Chancellor proposes to leave to them. They are not to exceed an increase of 6 per cent., but they are to give something
having regard to the extent to which by reason of the wasting nature of the source, the benefit of capital expenditure incurred in the trade or business may be exhausted at a greater rate——

Mr. Deputy-Speaker: I do not quite understand. I think that the hon. and learned Gentleman is speaking to the wrong Amendment. I thought the Amendment he was moving was that in Clause 52, page 57, line 35, to leave out "of metal."

Mr. Mitchison: I was taking the four Amendments together.
What I was going to say was, as regards the wasting nature of the sources, it is obvious that all mines and oil wells are wasting. They cannot carry the matter any further. As regards the length of time over which the source will subsist, it seems that there is already provision under Clause 52 (1) designed to deal with that aspect. I find it difficult to see how the gentlemen who have to adjudicate upon this matter cannot be influenced by the provisions in that Clause and, indeed, it would be somewhat unfair if they did not follow it pretty closely. Under those circumstances it seems to me that the directions as to what they are to do are distinctly uncertain, and the advantage of having them do it somewhat doubtful.
Having made these criticisms, I should like to say once again that, notwithstanding my preference for our own Amendment to apply the matter to mines generally instead of merely to mines of metal, we do recognise the concessions that have been made by the Chancellor in the arrangements which he proposes for the Board of Referees. These go a long way to meet the criticisms made in Committee. In short they are very much better than nothing. They meet the substance of what we are asking for, and while we prefer our own Amendment, that does not prevent us being grateful if the Amendment is rejected and the "Board of Dodoes" is revived or restored to increased vigour for this particular and, I think, rather peculiar purpose.

Mr. E. Fletcher: I beg to second the Amendment.
I also much prefer this Amendment to the series of Amendments which have been put down by the Chancellor of the Exchequer as a result of the useful discussion during the Committee stage, when it was recognised that the Bill did not go far enough and that some changes were necessary. It will be appreciated that in

taxation matters there is a considerable difference between companies that are engaged in any kind of mining activity, extracting things from the soil which are necessarily a wasting asset, and those companies engaged in productive activities like the production of textiles and other manufactured goods. Therefore, it has always been recognised that in taxation some concession of a capital nature is necessary to mining companies.
The objection we felt to this Clause as originally drafted was that for some quite obscure reasons concessions were limited to companies which were engaged in mining metals or in dealing with oil. We thought that the appropriate way of eradicating a quite unnecessary distinction would be to leave out the words "of metal." That is the simple nature of the Amendment which we propose. We see no reason why there should be any difference in this respect between mines of metal and mines of any other commodity. There are various non-metal mines which are equally deserving of this concession.
It is perfectly true that the Chancellor's Amendments seek to deal with certain specific commodities that were mentioned during the Committee stage. Coal and asbestos, for example, are dealt with specifically. But there are a number of other substances, some of which were mentioned on the Committee stage, for example salt, china clay, fluorspar, anhydrites, gypsum, pitchblende and others, all of which stake out the same kind of claim for relief, based upon the wasting nature of the commodity which is extracted from the earth.
It seems to us quite immaterial whether the commodity is a metal or a non-metal. The essential factor is that it comes out of the earth and there is a limited quantity in the earth, and that therefore there should be some allowance for capital depreciation. Our Amendment has also the merit that it is in line with existing taxation statutes and, as has been pointed out, in line with the recommendations of the Millard Tucker Committee. Knowing how much importance the Government attach to any Royal Commission or Committee which makes any recommendation, I should have thought that they would have welcomed recommendations coming from such an august body.
I do not like the suggestion that the companies should be given the right to go to the Board of Referees. Surely, it is for us to decide these matters; and these non-metal mining companies ought to know where they stand and ought to have the same advantages as metal mining companies. Why should china clay companies, for example, have to go to the Board of Referees?
Does any hon. Member know who comprise this Board of Referees, what it does, or what its qualifications are? And what expenditure and inconvenience are involved in staking a claim before the Board of Referees? My hon. and learned Friend the Member for Kettering (Mr. Mitchison) called it the "Dodoes." I do not want to make any disparaging remarks about the Board, but we think it is much better that this House should legislate and take responsibility and not continually refer matters to some outside extraneous body. Therefore, for these reasons, I hope that the House will accept our Amendment in preference to those of the Chancellor.

2.30 a.m.

The Solicitor-General: If I may say a word about the position under the old Excess Profits Tax, the House may remember that when E.P.T. was in existence, various industries could put forward claims for increased percentages. These claims were adjudicated upon by a board of referees. The hon. and learned Member for Kettering (Mr. Mitchison) has referred to the Board of Referees in somewhat derogatory terms. I do not think that those terms are in the least degree justified. The Board of Referees consists of persons drawn from a panel of businessmen, to whom questions of this character are from time to time referred.
What happened under the Excess Profits Tax legislation was that in relation to a number of industries, claims for extra percentages were granted by the Board of Referees. They could only give an increase
only so far as they think necessary to allow for the consideration that by reason of the wasting nature of the natural source in question, the benefit of capital expenditure incurred by the persons carrying on such trades or businesses may be exhausted at a greater rate than in the case of other classes of trades or businesses.
This Clause with two minor exceptions, began by giving an automatic increase

to all those industries which established their claims under the Excess Profits Tax legislation for increased percentages. The two exceptions were coal and asbestos, and the first two Amendments, in my right hon. Friend's name, are to add these two industries to the lists of industries which will automatically get the increase specified in Clause 52 (1).
It follows that those industries which have made out their claim to an increased percentage under the Excess Profits Tax legislation will not now have to go before the Board of Referees to make out their claim again. They will get that increased percentage as of right under subsection (1). In the Committee stage, the right hon. and hon. Gentleman and others on both sides of the House raised questions regarding other industries, some of which had claimed before the Board of Referees for an increased percentage and had failed, and some of which had not, for one reason or another, put forward claims.
On consideration, we thought the right course to take, and it is the course which these Amendments seek to adopt, was to revive the Excess Profits Tax system in relation to the Excess Profits Levy: that is to say, to make provision for any industry, which wishes to go before the Board of Referees and seek to establish its claim to an increased percentage.
There is no limitation upon the type of industry which can come forward, whether it is sand or ballast. But, when I say type of industry, it must relate to mineral deposits of a wasting nature. Whether it is sand or ballast or anhydrites, any industry of that character can come forward and seek to make out its case just as under the Excess Profits Tax legislation they could seek to make out their case.
If these Amendments are accepted, we shall be brought back to the position which worked quite well during the war under the Excess Profits Tax, with this variation that the claims which were established under that tax during the war are recognised as being entitled to the increased percentage without having again to be established before the Board of Referees. I hope that that makes clear what is the object of these Amendments, and bearing in mind that this will enable the various industries to which reference was made during the Com-


mittee stage to put forward their claims if they so desire, I hope that the House will find it possible to accept the Amendments.

Mr. Nabarro: I greatly welcome the interpolation of the word "coal" into this series of Amendments, for I raised this particular issue on the Committee stage and drew attention then to the fact that although the overwhelming bulk of the coal industry in the United Kingdom is indeed in public ownership, there were provisions in the Act of 1946 for the private licensing of pits which were deemed too small to be operated by the Coal Board. The position today is that there are some 300 pits which are operating under private licences. Out of the various divisions of the National Coal Board only one, the South-Eastern Division, has not got any licenced pits in its area.
Coal is, of course, the classic example of a wasting asset, and should figure prominently in the provisions for exceptional treatment in the Excess Profits Levy matters in this Clause. The 1946 Act refers specifically to those pits which produce only coal. But there is a parallel consideration which ought to be placed on record, and that is in the case of what are called B licences granted by the National Coal Board in the various divisions. They refer, under Section 39 (2, b) of the Act of 1946, to conditions where coal is worked alongside other products of a mineral character, such as, for instance, fireclay which perhaps cannot be extracted without the extraction of coal, or vice versa.
That is, perhaps, one good example of why it is so absolutely necessary to have an independent board to which cases of a controversial character can be referred for adjudication. The Board of Referees would be able, in cases of this sort, to determine whether such products as fireclay extracted from the pits alongside coal would rank for the exceptional provisions in the Excess Profits Levy matters under this Clause.
I think it is futile to say that the Board of Referees has no important task to perform. There are a large number of borderline cases which are certain to arise—for instance, the exploitation of oil shale, the examination of prospects

for extracting many new minerals and materials from beneath the soil of this country, all of which in the passage of time might be deemed to warrant consideration under the Excess Profits Levy provisions in this Clause. I welcome this series of Government Amendments, which I consider do a great deal to improve the original Clause.

Sir Herbert Williams: 1 am interested in this matter because of certain Amendments which I have tabled to the next Clause, and which it may not be necessary for me to move. I am not quite clear what the effect of this Amendment will be. What is a mine for this purpose? Is a mine anything where one extracts things without going underground to get them out? I am not quite clear about that. The Clause does not refer, I think, in the main to operations carried out in this country. There are a number of oil wells in this country, and there are a few metal mines. I do not know whether the opencast operations in Oxfordshire for the extraction of iron ore are mining operations. I am not certain what is meant. Is opencast working of coal mine-working?

Mr. Nabarro: Yes.

Sir H. Williams: I am glad to hear my hon. Friend's assertion, but I do not think he knows, and I do not know. What is a mine? Is it a place one goes down into by way of a pit shaft? Is it some sort of open quarry such as a slate quarry? I do not know. Let us get a precise definition. We are dealing with what will be an Act of Parliament. What does it mean? Several people have interrupted me, but I do not know what it means, and I do not think they do.

Mr. Nabarro: Will my hon. Friend allow me? There is an interesting precedent about opencast mining, for the House passed last year the Mineral Workings Act, and in the passage of that Act it was specifically stated that opencast operations would be deemed for the purpose of that Act to be mining operations.

Sir H. Williams: I know, but I do not know whether the interpretation provision gives us guidance in this matter, and whether a mine is the same thing as a quarry—a slate quarry, for instance. Is that a mine? I do not know whether


there are any legal experts here who know what the word "mine" really means.
If the Chancellor of the Exchequer has his way we shall insert "coal or." Does that mean opencast coal or coal from a deep mine? I am not quite sure. Then he talks about asbestos. I do not know of any asbestos mines in this country. Therefore, in the main this Clause does not refer to operations carried out in this country at all but to overseas operations—and properly: I think it is quite right that it should; but let us realise what we are discussing. I should be delighted to know what all this means.
The Solicitor-General made some reference to sand and ballast. I am not interested, but I am associated with them, as I mentioned on Committee stage. These are wasting assets, and I am told by those who have studied the matter that my right hon. Friend's Amendment to insert a new subsection (2) to the Clause will not really be of much advantage to the people engaged in sand and ballast extraction, because if they increase their output, which is what it may be wished they should do under the defence programme, they will pay more tax. May be I can say more on this subject when we get to the next Clause.

Mr. R. A. Butler: May I point out to my hon. Friend that I could not assist him and remain in order, because we discussed output on another Clause?

Sir H. Williams: Quite right. But what I want to know is, what does this Amendment mean? I do not know. What does the insertion of "asbestos" mean? Are we discussing production in this country or production in other countries, where the owners are corporate bodies in this country? It would be rather useful if we could be told.

2.45 a.m.

Mr. Gaitskell: I think that when this Clause was discussed in Committee we experienced one of the Solicitor-General's silent periods; we could not get much of an explanation as to why the words "of metal" were included in the Clause. However, we are grateful for the concessions made by the Chancellor, and they certainly vindicate the speeches made on

all sides protesting against the very limited character of the concessions in this Clause in the original Bill.
But I support the hon. Member for Croydon, East (Sir H. Williams) in his remarks about the definition of mines; because, if he is right, and the definition is limited to deep mining, then this concession is much less valuable than if it also applied to opencast and strip mining. I hope that the Solicitor-General will give us an assurance on this point.
At the same time, I am bound to say that this method of dealing with mineral deposits which has been chosen by the Chancellor is not a really satisfactory one We have not, for example, had any explanation as to why it is necessary to draw this distinction between oil wells, metal mining, coal, and asbestos on the one side—there are now those four in the one group—and everything else on the other. We are told by the Solicitor-General that the Government have taken out those industries which were successful in making application to the Board of Referees under the old Excess Profits Tax arrangement; but that assumes that the conditions operating to-day are exactly as when that duty was in operation as far back as the days of the last war, and I do not see why.
It is important now that we should increase supplies of sulphur for our industries, and the need to-day is for expanding our raw material resources both here and in the Commonwealth. That is more keenly appreciated than ever before, and it is difficult to know why these difficulties are put in the way of mineral operators in working coal, metal or asbestos, as well as drilling for oil. Could we have some further explanation of the basis for this distinction?
The Chancellor intervened during our earlier debate, and gave an undertaking that he would look at the whole matter again. He has done so, and, as I have already said, we are grateful; but I am sure he does not want any unnecessary bureaucracy. Yet, to bring in the Board of Referees here is bound to have that effect, as against the original, simple Amendment which, incidentally, was moved by the hon. Member for Altrincham and Sale (Mr. Enroll), who I wish was in his place now to see the


success he has achieved. That seemed to me a much more agreeable way of dealing with the matter, and what has been said so far about this restriction on the commodities which, for some reason or other are excluded from, shall we say, the favoured few, is something that I do not understand.

The Solicitor-General: By the leave of the House, I will endeavour to answer the points which have been made by the right hon. Member for Leeds, South (Mr. Gaitskell), and by my hon. Friend the Member for Croydon, East (Sir H. Williams). The House will see that whereas subsection (1) of the Clause does refer specifically to the mining of metal, subsection (2) is more widely drawn, and it is quite clear that under subsection (2) an application can be made in respect of any source of mineral deposits of a wasting nature.
There is no limitation which would exclude any form of extraction; that is to say, as far as subsection (2) is concerned it makes no difference whether the mineral is extracted as a result of a mining operation or as a result of surface excavation, such as happens in Northamptonshire in relation to iron ore.

Sir H. Williams: Does this refer to subsection (2) of the Bill or subsection (2) of the Amendment proposed?

The Solicitor-General: I am sorry if I did not make that clear. I was referring to subsection (2) which we are proposing, and which is on the Order Paper. If the hon. Gentleman will read that he will see, in the second line, that it is quite clear that there is no restriction at all. Subsection (1) is meant to cover—and I think it succeeds in so doing—those cases in which the claims were made out under the Excess Profits Tax law. The right hon. Member for Leeds, South suggests that it is by no means clear that they could make out the same claim now.

Mr. Gaitskell: I suggested that it was by no means clear that the others could make equally good claims now.

The Solicitor-General: The others can make a claim again.

Mr. Gaitskell: They do not get the concession automatically?

The Solicitor-General: They do not get it automatically. We cannot see that there is any reason why they should get it automatically. They have to make out their case. We are providing facilities for them to make out their case in exactly the same way as those who are getting it automatically made out their case. The same test is applied.
The wording of subsection (2) is similar to the wording under Excess Profits Tax legislation. If they satisfy the test the ones who have not got the increased percentage—those who have not claimed before or who have claimed unsuccessfully—can claim again, and if they can satisfy the Board of Referees they will get the same percentage. Applying the test that by reason of the wasting nature of the source in question the assets of the persons concerned may be exhausted at a greater rate than in the case of other classes of trades or businesses, if they can satisfy that test they will be entitled to a commensurate percentage.
I hope that I have made it clear, because Clause 52 (1) ought to save a great deal of trouble. The test being the same, it does not seem likely that those who succeeded last time before the Board of Referees would, if they had to claim again, fail this time.

Mr. Mitchison: As I understand it the annual allowances, under Sections 305, 306 and 307 of the Income Tax Act are automatic in the case of a trade which consists of or includes the working of any mine, oil well or other source of mineral deposits of a wasting nature. Is there really any distinction in principle between those provisions and these provisions?

The Solicitor-General: Interesting though it is, I do not think that question arises, with respect to the hon. and learned Member for Kettering (Mr. Mitchison), in relation to these Amendments, which are concerned with whether the increased percentage should be given to these specific industries. I am afraid that I cannot carry in my mind those particular Sections of the Income Tax Act to which the hon. and learned Gentleman referred; therefore I cannot pursue the matter any further at the moment.

Mr. Douglas Marshall: I presume that the china clay industry is included among these specific industries?

The Solicitor-General: I must apologise to my hon. Friend the Member for Bodmin (Mr. D. Marshall) for omitting that most important industry of Cornwall, namely the china clay industry. That industry, in common with that of sand and ballast, and any other industry which deals with mineral deposits, can claim under the proposed new subsection (2).

Mr. Geoffrey Wilson: As one who represents a division which produces china clay I should like to thank the Chancellor of the Exchequer for mentioning this commodity. All connected with the industry will be grateful to him for the concession.

Amendment negatived.

Amendments made: In page 57, line 35, after second "of," insert "coal or."

In line 35, after "wells," insert "or asbestos."—[Mr. R. A. Butler.]

Mr. R. A. Butler: I beg to move, in page 57, line 43, to leave out "Provided that," and to insert:
(2) The Board of Referees may, on an application made in that behalf, by order direct, as respects a source of mineral deposits of a wasting nature of any kind other than those mentioned in the preceding subsection, that where a body corporate's trade or business consists of or includes the working of such a source, each of the percentages referred to in the provisions mentioned in the preceding subsection shall be deemed to be increased to such extent, not being more than six per cent., as the Board think necessary having regard to the extent to which, by reason of the wasting nature of the source, the benefit of capital expenditure incurred in that trade or business may be exhausted at a greater rate than in the case of other classes of trades or businesses.
(3).

Sir H. Williams: We did not discuss the text of this Amendment when we had the general discussion.

Mr. Butler: I think I ought to remind the House that there was an agreement that if a general discussion took place there would not be discussion later. I submit myself to your Ruling on that, Mr. Deputy-Speaker.

Mr. Deputy-Speaker (Sir Charles MacAndrew): That was agreed.

Sir H. Williams: I did not agree.

Mr. Deputy-Speaker: I did not hear the hon. Member express any objection at the time. I said that that was my intention, and no one said a word. I therefore cannot allow discussion now.

Sir H. Williams: I was not present then.

Mr. Deputy-Speaker: I am not going to have this Ruling discussed. No one took exception at the time, and I am not going to allow it to be discussed now.

Amendment agreed to.

Further Amendments made: In page 57, line 44, leave out "the source" and insert:
such a source as is mentioned in the preceding provisions of this section.

Page 58, line 1, after "of," insert "subsection (1) of."—[Mr. R. A. Butler.]

The Solicitor-General: I beg to move, in page 58, line 18, at the end, to insert:
(4) The Commissioners may by statutory instrument make regulations with respect to the making of applications to the Board of Referees under subsection (2) of this section and the procedure on such applications.
Any statutory instrument made under this subsection shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.
This Amendment is similar to the provision in the Excess Profits Tax law providing that the Commissioners may, by Statutory Instrument, make regulations with respect to applications by the Board of Referees. Any Statutory Instrument so made will be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Mr. E. Fletcher: I want to ask the learned Solicitor-General why the Statutory Instruments are made by the Commissioners. Would it not be more natural for the Treasury to make them? The Solicitor-General says this is in line with the Regulations in respect of the Excess Profits Tax. There have been considerable changes in our general method of dealing with delegated legislation. The Statutory Instrument as such was not known when that law was made, and in view of the tightening up since then I would have thought it would have been more in accord with normal practice for the Statutory Instruments to be made by the Treasury.

3.0 a.m.

The Solicitor-General: If I may speak again by leave of the House, the power possessed by the Commissioners is exactly the same as that previously possessed by them. I see nothing irregular or odd in the Commissioners having the power to make regulations.

Amendment agreed to.

Clause 53.—(CONCERNS PRODUCING CERTAIN METALS, OIL OR ASBESTOS.)

Mr. Albu: I beg to move, in page 58, line 20, after "of," to insert "coal."

Mr. Speaker: The House might also discuss with this Amendment further Amendments to the Clause dealing with coal and also ballast and sand.

Mr. R. A. Butler: May we take all the Amendments down to the one in page 59, line 38, after "asbestos," to insert "or ballast and sand"?

Mr. Speaker: Yes.

Mr. Gaitskell: I see no objection to discussing these Amendments together, but they are very different.

Mr. Speaker: It may be necessary to put some of them separately afterwards.

Mr. Albu: The object of our Amendments is to bring the concessions in Clause 53 into line with those granted in respect of Clause 52. The concessions in Clause 52 are in respect of percentages for applying capital standards and so forth, whereas in the case of Clause 53 a concession has been granted for a reduction in the amount representing profit on additional output achieved during the chargeable accounting period.
The cases and the arguments for the concessions appear to be the same. There cannot be any reason why the concession granted in one case should not be given in the other. As the Chancellor has now added coal mining to the mines and other wasting asset industries in Clause 52 it would be logical to grant the same concession in the case of Clause 53, so that there is a reduction where output is expanded.

Mr. G. R. Mitchison: I beg to second the Amendment.
In the first place, I see no reason for distinguishing between the two Clauses as regards coal. Though I realise that

there are differences in their objects, the principle seems to be the same. In the second place, I shall rely with confidence on the support for the Amendment of the hon. Member for Kidderminster (Mr. Nabarro), who will otherwise find it impossible to reconcile his present attitude with what he said when he last addressed the House.

Sir H. Williams: It might save time if I say that the principle of the Amendment is the same as that of a number of Amendments in my name. I see no reason why certain commodities which are extracted from the soil should have a preference over other commodities. They are all wasting assets.
The sand and ballast industry, with which I am associated, although I am not in it, is using a wasting asset in a number of cases. If, under the pressure of the re-armament programme, it is asked to double its output many firms will be worse off than if they restricted their output. People who are asked by Government Department to increase their output may well lose money, and not the reverse. The cases for coal and for ballast and sand are fundamentally the same. The case is made out by hon. Members opposite is overwhelmingly strong and I support them, both in regard to coal and any other mineral commodity.

Mr. R. A. Butler: I can deal with all these Amendments together by the proposal that I now have to make, which would cover every one of the commodities or extractive products which are referred to in these Amendments. In view of the nature of the proposal I do not wish to discuss the merits of any one of these, because in that way I might be prejudicing their future chances.
In general, however, up till now, the criterion has been—as I said when I intervened shortly earlier—the use of such products in the re-armament programme or their application in some way or another to the balance of payments. But, leaving that on one side, I simply want to say that I am quite sure that the best way to deal with these is to adopt the precedent of the last war Excess Profits Tax. That means that I am not putting down, and have not put down,


any Amendment to extend the general scope of Clause 53 to cover other than is included in the side note—concerns producing certain metals, oil, or asbestos.
But I propose that the whole field, including all these products—that is to say, starting with the one referred to by the hon. Member for Edmonton (Mr. Albu), taking in ballast and sand, which was dealt with by the hon. Member for Croydon, East (Sir Herbert Williams), and taking in any other commodity mentioned in the Amendments—should be reviewed before next year's Finance Bill; and in the event of the Treasury finding that there is a compelling case for increasing the output of any of these in the national interest we shall undertake, in next year's Bill, so to amend this Clause as to have retrospective effect in relation to whatever product we decide can legitimately be included.
This will not involve any serious difficulty to industry, because in the event of a decision being reached in their favour—and it will take a little time to investigate all their claims—then the retrospective effect will be to the first date of the operation of the Excess Profits Levy. This will give each industry an opportunity of making out its case before any relief is given, and this will achieve justness in all these cases.
That is the value of the precedent. Under the last war Excess Profits Tax it was governed by Section 31 of the Finance Act, 1941, and a further reference is Section 21 of the Finance Act, 1943. There was a further reference in Section 34 of the Finance Act, 1944. I believe that that is the fairest and best way of making sure that all these products are adequately dealt with, including that mentioned by the hon. Member for Edmonton. If hon. Members will accept that, I think they will find it the fairest way of dealing with the matter.

Mr. Mitchison: The Amendment that he has put down to Clause 52 applies to mineral deposits of a wasting nature of any kind, other than those mentioned in the preceding subsection. It therefore includes a rather wider group of substances than those which are included now, whether by reference in the original text or in the Amendments. Since this

is not a matter that calls for amendment at this stage, would the right hon. Gentleman be prepared to tell us now, or to consider later, whether the undertaking he has given could be applied to that rather wider group and not merely be confined to those particular substances which happen to have been mentioned in these amendments?

Mr. Butler: It is true that if we look back to Clause 52 we find a reference to minerals of a wasting nature of any kind other than those mentioned in the previous subsection. It is quite clear that discretion would remain to the Chancellor and the Treasury to review any matter, because anything can be inserted in next year's Finance Bill in this Clause.
Naturally I would not wish to regard the fact that hon. Members have chosen certain products in this list as being entirely exclusive. In the last war, for example, in E.P.T. there was reference to sand, gravel, limestone, sandstone, mica, chalk, asbestos, and so forth. I would not wish to fail to give consideration to any product that might legitimately be considered.

Mr. Gaitskell: I am not very satisfied with the Chancellor's reply. It is the object of the Amendments put down by my hon. Friends to do two things: first, to insert coal as one of the commodities that will obtain the benefit of the concessions granted in this particular Clause, and, secondly, to introduce—which they do by the Amendment to page 60, line 11, which I understand is to be taken with this,—a new subsection (9).

Mr. Butler: I understand that that Amendment was not selected, so I have not referred to it.

Mr. Gaitskell: I understood that you had selected this Amendment, Mr. Speaker.

The Speaker: I think that the discussion we were having covered that Amendment.

Mr. Butler: I received information from the Chair that it was not selected, Sir. I now understand it has been selected, which means that I have given it no consideration whatever.

Mr. Gaitskell: When the right hon. Gentleman has heard my explanation, he will find it very easy to accept this Amendment. It is designed to introduce into this Clause just the same arrangement as the Chancellor himself has proposed for Clause 52. That is to say, that whereas certain commodities, which he selected, metal, oil, asbestos—and coal if our earlier Amendment is accepted—automatically get the benefit of the concession provided in Clause 53, other minerals, commodities which are derived from the working of sources of mineral deposits, of a wasting nature, can obtain the concession, provided the Treasury agree that the circumstances are appropriate.
We have introduced, it is true, in this case the Treasury as the deciding body instead of the Board of Referees. First, as the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Islington, East (Mr. E. Fletcher) explained, there was no great enthusiasm on their part for the Board of Referees in this particular case, and, secondly, if one turns back to Clause 52, one finds that it was in any case the Treasury who have to certify that an increase in the output of metal, oil, asbestos, and so on, is essential. The Chancellor really cannot say to us that an increase in the output of coal is not essential. If he agrees it is essential, what is the reason for leaving it out of this Clause?
I cannot understand how the right hon. Gentleman can say that they can give this concession to metal, oil and asbestos because they have to increase their output—because that is the whole purpose of the Clause—but they cannot do it for coal. If there is one commodity of which the increase in output is overwhelmingly important for the balance of payments, it is coal. We know perfectly well that if we can increase our output of coal more rapidly, we can increase our exports to Europe and other parts of the world. We would be easing the whole of the world dollar situation. If that is the case there is no reason why coal should not be included in this Clause.
3.15 a.m.
It really is not good enough to say, "I will have a look at it and perhaps make it retrospective a year hence." This is so obvious that I really cannot understand the attitude of the Chancellor. As for the proposed new subsection, it seems to me

that what we propose is very reasonable. All we have done is to try to bring this Clause into line with earlier Clauses in the Bill.

Mr. Nabarro: Is the right hon. Gentleman referring to the whole of the nationalised industry as well as the narrow sector of privately licensed pits to which I referred earlier, or only to the latter?

Mr. Gaitskell: I am referring to the whole industry. I do not exclude the hon. Gentleman's particular interests—the licensed pits. If we can get more coal from them, so much the better. It is obviously desirable that we should get more coal, wherever we can get it, in this country.
What the Amendment does is to grant the benefits of this Clause to other sources of mineral deposits. Though I personally agree with the hon. Member for Croydon, East (Sir H. Williams) that it would have been better to grant these things automatically, it does not matter a great deal in this case because here the Treasury have to certify, in any case, that an increase in the output of these products is essential in the national interest. I hope very much that we shall have the hon. Member's support.

Sir H. Williams: I am grateful for what my right hon. Friend the Chancellor of the Exchequer has said. It is not quite what I should like. I always hate retrospective legislation even when it is to the advantage of my friends. But it is not too bad, so I will not move the Amendment in my name.

Mr. Butler: With the permission of the House, I should like to say that I am sorry that I was unable to give an immediate answer to the Amendment in page 60, line 11. I think that over 1,000 pieces of paper would be necessary to be thoroughly briefed on these two days of debate. I am sorry; I thought that the papers on the Amendments not selected had been removed from my file, but I have now recaptured the suitable document and I am fully informed. The suggestion I have made absolutely meets the point of the Amendment, because we are carrying out the procedure which gives to the Treasury both the time and the opportunity to put into the Clause in next year's Finance Bill the metal or


extractive products which we think are worthy of being so included.
Therefore, I do not think the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) and his hon. Friends will lose in any way in connection with the products in which they are interested by the procedure which I suggest. In fact it is a major concession covering all the products that satisfy the test. I am not prepared to put coal in——

Mr. Mitchison: Mr. Mitchison rose——

Mr. Butler: It is very difficult to make a case when one is interrupted.

Mr. Mitchison: If the right hon. Gentleman will allow me, I should like to ask him one question. I agree with him that this Clause, in every respect but one, conforms entirely with what was said just now. The respect is that if this Amendment is accepted there will be no need for retrospective legislation and the matter will still remain at the discretion of the Treasury. Surely, in the circumstances it is much better to take the opportunity presented by this Amendment and to do exactly what is intended to be done as from now, instead of being forced into retrospective legislation next year.

Mr. Butler: Having understood that that Amendment was not being called, we did not give it the full consideration that it otherwise might have had and I regret that misunderstanding. But the position is not very much altered by that misunderstanding, because I believe that our procedure is better and gives more opportunity to proceed, in the way that

I have suggested, on the basis of precedent in legislation which I have mentioned and of procedure which was successful in the case of the last Excess Profits Tax. I think hon. Members will find that a fairer and a surer way of dealing with their product.

I was coming to the point of coal. The right hon. Gentleman is right. There is no more important commodity than coal. We may well depend for our survival on the extent to which we can export coal for the rest of this year. I take as serious a view of the matter as that. I am not prepared, however, to put coal in here straight away. I want to remind the House that in Clause 55 (4) the National Coal Board have a standard for the Excess Profits Levy which they may find very favourable.

It will be open to the Board to make a claim for increased percentage allowances under Clause 52, if the future life of the United Kingdom coal deposits is short enough to justify such a claim. I believe that the position in respect of coal is not going to be prejudiced, if we read the provisions of the Bill, as a whole. In fact, I think the Bill is helping it. Anybody who knows about the National Coal Board's position and the coal industry, thinks so, too. If it were found, in this question of output allowance, that it would be wise to insert coal, I can only give an assurance that as coal is of such supreme importance, its case would not be prejudiced, but rather helped, by the procedure I suggest.

Question put, "That 'coal' be there inserted in the Bill."

The House divided: Ayes, 189; Noes, 203.

Division No. 176.]
AYES
[3.23 a.m.


Acland, Sir Richard
Braddock, Mrs. Elizabeth
Davies, Ernest (Enfield, E.)


Adams, Richard
Brockway, A. F.
Davies, Harold (Leek)


Albu, A. H.
Brook, Dryden (Halifax)
Davies, Stephen (Merthyr)


Allen, Scholefield (Crewe)
Broughton, Dr. A. D. D.
de Freitas, Geoffrey


Attlee, Rt. Hon. C. R.
Brown, Rt. Hon George (Belper)
Deer, G.


Awbery, S. S.
Burton, Miss F. E.
Delargy, H. J


Bacon, Mist Alice
Butler, Herbert (Hackney, S.)
Dodds, N. N.


Baird, J.
Callaghan, L. J.
Donnelly, D. L.


Barnes, Rt. Hon. A. J
Castle, Mrs. B. A.
Dugdale, Rt. Hon John (W. Bromwich)


Bence, C. R.
Chapman, W. D.
Ede, Rt. Hon. J. C


Benn, Wedgwood
Chetwynd, G. R.
Edwards, John (Brighouse)


Benson, G.
Clunie, J.
Evans, Albert (Islington S.W.)


Beswick, F.
Collick, P. H.
Evans, Edward (Lowestoft)


Bing, G. H. C.
Corbet, Mrs. Freda
Evans, Stanley (Wednesbury)


Blackburn, F.
Craddock, George (Bradford, S.)
Ewart, R.


Blenkinsop, A.
Crossman, R. H. S
Fernyhough, E


Blyton, W. R.
Daines, P.
Field, W. J.


Boardman, H.
Dalton, Rt. Hon. H.
Finch, H. J


Bottomley, Rt. Hon. A. G.
Darling, George (Hillsborough)
Fletcher, Eric (Islington, E.)


Bowden, H. W
Davies, A. Edward (Stoke, N.)
Fool, M. M.




Forman, J. C.
MacColl, J. E.
Schofield, S. (Barnsley)


Fraser, Thomas (Hamilton)
McGovern, J.
Shinwell, Rt. Hon E.


Freeman, John (Watford)
McInnes, J.
Short, E. W.


Freeman, Peter (Newport)
McKay, John (Wallsend)
Shurmer, P. L. E.


Gaitskell, Rt. Hon. H. T N.
McLeavy, F.
Silverman, Julius (Erdington)


Gibson, C. W.
MacPherson, Malcolm (Stirling)
Simmons, C. J. (Brierley Hill)


Glanville, James
Mallalieu, J. P. W. (Huddersfield, E.)
Slater, J.


Gordon Walker, Rt. Hon. P. C.
Mann, Mrs. Jean
Snow, J. W.


Greenwood, Anthony (Rossendale)
Manuel, A. C.
Sorensen, R. W.


Crey, C. F.
Marquand, Rt. Hon. H. A.
Soskice, Rt. Hon. Sir Frank


Griffiths, David (Rother Valley)
Mayhew, C. P.
Sparks, J. A.


Griffiths, William (Exchange)
Mellish, R. J.
Stewart, Michael (Fulham, E.)


Hale, Leslie (Oldham, W.)
Mitchison, G. R
Swingler, S. T.


Hall, John (Gateshead, W.)
Moody, A. S
Taylor, John (West Lothian)


Hamilton, W. W.
Morley, R.
Taylor, Rt. Hon. Robert (Morpeth)


Hargreaves, A.
Mort, D. L.
Thomas, David (Aberdare)


Hayman, F. H.
Moyle, A.
Thomas, George (Cardiff)


Healey, Denis (Leeds, S.E.)
Mulley, F. W.
Thomas, Iorwerth (Rhondda, W.)


Henderson, Rt. Hon. A. (Rowley Regis)
Murray, J. D.
Ungoed-Thomas, Sir Lynn


Herbison, Miss M.
Nally, W.
Wallace, H. W.


Hobson, C. R.
Noel-Baker, Rt. Hon. P. J
Watkins, T. E.


Houghton, Douglas
Orbach, M.
Weitzman, D.


Hoy, J. H.
Oswald, T.
Wells, Percy (Faversham)


Hudson, James (Ealing, N.)
Padley, W. E.
Wells, William (Walsall)


Hughes, Cledwyn (Anglesey)
Paling, Will T. (Dewsbury)
West, D. G.


Hughes, Emrys (S. Ayrshire)
Pannell, Charles
Whealley, Rt. Hon. John


Hughes, Hector (Aberdeen, N.)
Pargiter, G. A.
White, Mrs. Eirene (E. Flint)


Hynd, H. (Accrington)
Paton, J.
Whiteley, Rt. Hon. W


Hynd, J. B. (Attercliffe)
Pearson, A.
Wigg, George


Irving, W. J. (Wood Green)
Peart, T. F.
Wilkins, W. A.


Jay, Rt. Hon. D. P. T.
Plummer, Sir Leslie
Willey, Frederick (Sunderland, N.)


Jenkins, R. H. (Stechford)
Popplewell, E.
Willey, Octavius (Cleveland)


Johnson, James (Rugby)
Price, Joseph T. (Westhoughton)
Williams, Rev. Llywelyn (Abertillery)


Johnston, Douglas (Paisley)
Price, Philips (Gloucestershire, W.)
Williams, Ronald (Wigan)


Jones, David (Hartlepool)
Proctor, W T.
Williams, W. R. (Droylsden)


Jones, Frederick Elwyn (West Ham, S.)
Rankin, John
Williams, W. T. (Hammersmith, S.)


Jones, Jack (Rotherham)
Reid, Thomas (Swindon)
Wilson, Rt. Hon. Harold (Huyton)


Jones, T. W.
Rhodes, H.
Winterbottom, Ian (Nottingham, C.)


Keenan, W.
Robens, Rt. Hon. A.
Wyatt, W. L.


King, Dr. H. M.
Roberts, Albert (Normanton)
Yates, V. F.


Lee, Frederick (Newton)
Roberts, Goronwy (Caernarvonshire)
Younger, Rt. Hon. K,


Lever, Leslie (Ardwick)
Robinson, Kenneth (St. Pancras, N.)



Lewis, Arthur
Rogers, George (Kensington, N.)
TELLERS FOR THE AYES:


Lindgren, G. S
Ross, William
Mr. Hannan and Mr. Royle.




NOES


Allan, R. A. (Paddington, S.)
Channon, H.
Harvey, Ian (Harrow, E)


Alport, C. J. M.
Clarke, Col. Ralph (East Grinstead)
Hay, John


Amery, Julian (Preston, N.)
Cole, Norman
Heald, Sir Lionel


Anstruther-Gray, Major W. J.
Conant, Maj. R. J. E.
Heath, Edward


Ashton, H. (Chelmsford)
Cooper, Sqn. Ldr. Albert
Higgs, J. M. C.


Assheton, Rt. Hon. R. (Blackburn, W.)
Cooper-Key, E. M.
Hill, Dr. Charles (Luton)


Astor, Hon. J. J. (Plymouth, Sutton)
Cranborne, Viscount
Hill, Mrs. E. (Wythenshawe)


Baldwin, A. E.
Crookshank, Capt. Rt. Hon. H. F. C.
Hinchingbrooke, Viscount


Banks, Col. C.
Crosthwaite-Eyre, Col. O. E.
Holland-Martin, C J


Barber, A. P. L.
Crouch, R. F.
Hollis, M. C.


Barlow, Sir John
Crowder, Petre (Ruislip—Northwood)
Holt, A. F.


Baxter, A. B.
Darling, Sir William (Edinburgh, S.)
Hope, Lord John


Beach, Maj. Hicks
Deedes, W. F.
Hopkinson, Henry


Beamish, Maj. Tufton
Digby, S. Wingfield
Hornsby-Smith, Miss M P


Bell, Philip (Bolton, E.)
Donaldson, Cmdr C. E. McA
Horobin, I. M.


Bell, Ronald (Bucks, S.)
Doughty, C. J. A.
Horsbrugh, Rt. Hon. Florence


Bennett, F. M. (Reading, N.)
Drayson, G. B.
Howard, Greville (St. Ives)


Birch, Nigel
Drewe, C.
Hudson, Sir Austin (Lewisham, N.)


Bishop, F. P.
Duncan, Capt. J. A. L.
Hutchinson, Sir Geoffrey (Ilford, N.)


Black, C. W.
Eccles, Rt. Hon. D. M.
Hutchison, Lt.-Com. Clark (E'b'rgh, W.)


Boothby, R. J. G
Eden, Rt. Hon. A.
Hyde, Lt.-Col. H. M.


Bossom, A. C.
Fell, A.
Johnson, Eric (Blackley)


Boyd-Carpenter, J. A.
Fisher, Nigel
Jones, A. (Hall Green)


Boyle, Sir Edward
Fleetwood-Hesketh, R. F.
Kerr, H. W. (Cambridge)


Braine, B. R.
Fletcher-Cooke, C
Lambert, Hon. G.


Bromley-Davenport, Lt.-Col. W. H.
Foster, John
Lambton, Viscount


Brooke, Henry (Hampstead)
Gage, C. H.
Lancaster, Col. C. G.


Brooman-White, R. C.
Galbraith, T. G. D. (Hillhead)
Legge-Bourke, Maj E. A. H


Browne, Jack (Govan)
Garner-Evans, E. H.
Legh, P. R. (Petersfield)


Buchan-Hepburn, Rt. Hon. P. G. T
Godber, J. B.
Lindsay, Martin


Bullard, D. G.
Gomme-Duncan, Col. A.
Linstead, H. N.


Burden, F. F. A.
Gough, C. F. H.
Lloyd, Maj. Guy (Renfrew, E.)


Butcher, H. W.
Graham, Sir Fergus
Lockwood, Lt.-Col. J. C.


Butler, Rt. Hon. R. A. (Saffron Walden)
Grimond, J.
Longden, Gilbert (Herts, S.W.)


Carr, Robert (Mitcham)
Harris, Frederic (Croydon, N.)
Lucas, Sir Jocelyn (Portsmouth, S.)


Carson, Hon. E.
Harris, Reader (Heston)
Lucas, P. B. (Brentford)


Cary, Sir Robert
Harrison, Col. Harwood (Eye)
Lucas-Tooth, Sir Hugh







McAdden, S. J
Pilkington, Capt. R. A
Taylor, William (Bradford, N.)


Macdonald, Sir Peter (I. of Wight)
Pitman, I. J.
Thomas, Rt. Hon. J P. L. (Hereford)


Mackeson, Brig. H. R.
Powell, J. Enoch
Thomas, P. J. M. (Conway)


McKibbin, A. J.
Price, Henry (Lewisham, W)
Thompson, Kenneth (Walton)


McKie, J. H. (Galloway)
Profumo, J. D.
Thompson, Lt.-Cdr. R. (Croydon, W.)


Macmillan, Rt. Harold (Bromley)
Raikes, H. V.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Macpherson, Maj. Niall (Dumfries)
Rayner, Brig. R,
Thornton-Kemsley, Col. C. N.


Maitland, Patrick (Lanark)
Redmayne, M.
Tilney, John


Manningham-Buller, Sir R. E.
Remnant, Hon. P.
Touche, Sir Gordon


Markham, Major S. F.
Roberts, Peter (Heeley)
Tweedsmuir, Lady


Marplot, A. E.
Rodgers, John (Sevenoaks)
Vane W. M. F.


Marshall, Douglas (Bodmin)
Roper, Sir Harold
Vaughan-Morgan, J K


Marshall, Sir Sidney (Sutton)
Ropner, Col. Sir Leonard
Vosper, D. F.


Maudling, R.
Russell, R. S.
Wakefield, Edward (Derbyshire, W.)


Maydon, Lt.-Comdr. S L. C
Ryder, Capt. R. E.
Wakefield, Sir Wavell (Marylebone)


Medlicott, Brig. F.
Salter, Rt. Hon. Sir Arthur
Walker-Smith, D. C.


Mellor, Sir John
Schofield, Lt.-Col. W. (Rochdale)
Ward, Hon. George (Worcester)


Morrison, John (Salisbury)
Shepherd, William
Ward, Miss I. (Tynemouth)


Mott-Radclyffe, C. E.
Simon, J. E. S. (Middlesbrough, W)
Waterhouse, Capt Rt. Hon. C


Nabarro, G. D. N.
Smiles, Lt.-Col. Sir Walter
Webbe, Sir H. (London &amp; Westminster)


Nicholls, Harmer
Smithers, Peter (Winchester)
Wellwood, W.


Nicolson, Nigel (Bournemouth, E.)
Soames, Capt. C.
White, Baker (Canterbury)


Nield, Basil (Chester)
Speir, R. M.
Williams, Gerald (Tonbridge)


Noble, Cmdr. A. H. P
Spence, H. R. (Aberdeenshire, W.)
Williams, Sir Herbert (Croydon, E.)


Odey, G. W.
Stanley, Capt. Hon. Richard
Williams, R. Dudley (Exeter)


Ormsby-Gore, Hon. W. D
Stevens, G. P.
Wills, G.


Orr, Capt. L. P. S.
Storey, S.
Wilson, Geoffrey (Truro)


Osborne, C.
Strauss, Henry (Norwich, S.)
Wood, Hon. R


Partridge, E.
Studholme, H. G



Peto, Brig. C. H. M
Summers, G. S.
TELLERS FOR THE NOES:


Peyton, J. W. W.
Sutcliffe, H.
Mr. Oakshott and Mr. Kaberry.


Pickthorn, K. W. M.
Taylor, Charles (Eastbourne)

Amendments made, in page 59, line 22, leave out paragraph (a) and insert:
(a) where the body corporate makes an election under paragraph (b) or paragraph (c) of subsection (4) of section thirty-six of this Act, the end of the year specified in the election;

In page 59, leave out lines 29 to 33.—[Mr. R. A. Butler.]

3.30 a.m.

Mr. Speaker: The next Amendment is a Government Amendment in page 62, line 28.

Mr. Gaitskell: On a point of order. Are you not, Mr. Speaker, going to call the Amendment of my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) in page 60, line 11? We have discussed that, but I understood it was to be called.

Mr. Speaker: It was covered in the debate.

Mr. Gaitskell: Yes, but I particularly asked that the Amendments should be

called separately, so that we could vote on them if we wished to.

Mr. Speaker: Very well; but it must be moved.

Mr. E. Fletcher: I beg to move, in page 60, line 11, at the end, to insert:
(9) The Treasury may, on an application made in that behalf by a body corporate whose trade or business consists of or includes the working of a source of mineral deposits of a wasting nature, not being a body corporate such as is mentioned in subsection (1) of this section, direct that the provisions of this section shall have effect with regard to the body corporate making such application, and if the Treasury so direct the said provisions shall with the necessary adaptations have effect accordingly with regard to that body corporate.

Mr. Lee: I beg to second the Amendment.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 189; Noes, 203.

Division No. 177.]
AYES
[3.34 a.m.


Acland, Sir Richard
Benson, G
Broughton, Dr. A D. D


Adams, Richard
Beswick, F.
Brown, Rt. Hon. George (Belper)


Albu, A. H.
Bing, G. H. C
Burton, Miss F. E.


Allen, Scholefield (Crewe)
Blackburn, F.
Butler, Herbert (Hackney, S.)


Attlee, Rt. Hon. C. R
Blenkinsop, A.
Callaghan, L. J.


Awbery, S. S.
Blyton, W. R.
Castle, Mrs. B. A


Bacon, Miss Alice
Boardman, H.
Chapman, W. D.


Baird, J.
Bottomley, Rt. Hon. A. G
Chetwynd, G. R


Barnes, Rt. Hon. A J
Braddock, Mrs. Elizabeth
Clunie, J.


Bence, C. R.
Brockway, A. F.
Collick, P. H.


Bonn, Wedgwood
Brock, Dryden (Halifax)
Corbet, Mrs. Freda




Craddock, George (Bradford, S.)
Hughes, Hector (Aberdeen, N.)
Rankin, John


Crossman, R. H. S.
Hynd, H. (Accrington)
Reid, Thomas (Swindon)


Dames, P.
Hynd, J. B. (Attercliffe)
Rhodes, H.


Dalton, Rt. Hon. H.
Irving, W. J. (Wood Green)
Robens, Rt. Hon. A.


Darling, George (Hillsborough)
Jay, Rt. Hon. D. P. T.
Roberts, Albert (Normanton)


Davies, A. Edward (Stoke, N.)
Jenkins, R. H. (Stechford)
Roberts, Goronwy (Caernarvonshire)


Davits, Ernest (Enfield, E.)
Johnson, James (Rugby)
Rogers, George (Kensington, N.)


Davies, Harold (Leek)
Johnston, Douglas (Paisley)
Ross, William


Davies, Stephen (Merthyr)
Jones, David (Hartlepool)
Royle, C.


de Freitas, Geoffrey
Jones, Frederick Elwyn (West Ham, S.)
Schofield, S. (Barnsley)


Deer, G.
Jones, Jack (Rotherham)
Shinwell, Rt. Hon. E.


Delargy, H. J.
Jones, T. W. (Merioneth)
Short, E. W.


Dodds, N. N.
Keenan, W.
Shurmer, P. L. E


Donnelly, D. L.
King, Dr. H. M.
Silverman, Julius (Erdington)


Dugdale, Rt. Hon. John (W. Bromwich)
Lee, Frederick (Newton)
Simmons, C. J (Brierley Hill)


Ede, Rt Hon. J. C.
Lever, Leslie (Ardwick)
Slater, J.


Edwards, John (Brighouse)
Lewis, Arthur
Snow, J. W.


Evans, Albert (Islington, S.W.)
Lindgren, G. S.
Sorensen, R. W.


Evans, Edward (Lowestoft)
MacColl, J. E.
Soskice, Rt. Hon. Sir Frank


Evans, Stanley (Wednesbury)
McGovern, J.
Sparks, J. A.


Ewart, R.
McInnes, J.
Stewart, Michael (Fulham, E.)


Fernyhough, E.
McKay, John (Wallsend)
Swingler, S. T.


Field, W. J.
McLeavy, F.
Taylor, John (West Lothian)


Finch, H. J.
MacPherson, Malcolm (Stirling)
Taylor, Rt. Hon. Robert (Morpeth)


Fletcher, Eric (Islington, E.)
Mallalieu, J. P. W. (Huddersfield, E.)
Thomas, David (Aberdare)


Foot, M. M.
Mann, Mrs. Jean
Thomas, George (Cardiff)


Forman, J. C.
Manuel, A. C.
Thomas, Iorwerth (Rhondda, W.)


Fraser, Thomas (Hamilton)
Marquand, Rt. Hon. H. A.
Ungoed-Thomas, Sir Lynn


Freeman, John (Watford)
Mayhew, C. P.
Wallace, H. W.


Freeman, Peter (Newport)
Mellish, R. J.
Watkins, T. E.


Gaitskell, Rt. Hon. H. T. N.
Mitchison, G. R
Weitzman, D.


Gibson, C. W.
Moody, A. S.
Wells, Percy (Faversham)


Glanville, James
Morley, R.
Wells, William (Walsall)


Gordon Walker, Rt. Hon. P. C.
Mort, D. L.
West, D. G.


Greenwood, Anthony (Rossendale)
Moyle, A.
Wheatley, Rt. Hon. John




White, Mrs. Eirene (E. Flint)


Grey, C. F.
Mulley, F. W.
Whiteley, Rt. Hon. W.


Griffiths, David (Rother Valley)
Murray, J. D.
Wigg, George


Griffiths, William (Exchange)
Nally, W.
Wilkins, W. A.


Hale, Leslie (Oldham, W.)
Noel-Baker, Rt. Hon. P. J.
Willey, Frederick (Sunderland, N.)


Hall, John (Gateshead, W.)
Orbach, M.
Willey, Octavius (Cleveland)


Hamilton, W. W.
Oswald, T.
Williams, Rev. Llywelyn (Abertillery)


Hannan, W.
Padley, W. E
Williams, Ronald (Wigan)


Hargreaves, A.
Paling, Will T. (Dewsbury)
Williams, W. R. (Droylsden)


Hayman, F. H.
Pannell, Charles
Williams, W. T. (Hammersmith, S.)


Healey, Denis (Leeds, S.E.)
Pargiter, G. A.
Wilson, Rt. Hon. Harold (Huyton)


Henderson, Rt. Hon. A. (Rowley Regis)
Paton, J.
Winterbottom, Ian (Nottingham, C.)


Herbison, Miss M.
Pearson, A.
Wyatt, W. L.


Hobson, C. R.
Peart, T. F.
Yates, V. F.


Houghton, Douglas
Plummer, Sir Leslie
Younger, Rt. Hon. K.


Hoy, J. H.
Popplewell, E.



Hudson, James (Ealing, N.)
Price, Joseph T. (Westhoughton)
TELLERS FOR THE AYES:


Hughes, Cledwyn (Anglesey)
Price, Philips (Gloucestershire, W.)
Mr. Bowden and


Hughes, Emrys (S. Ayrshire)
Proctor, W. T.
Mr. Kenneth Robinson.




NOES


Allan, R. A. (Paddington, S.)
Browne, Jack (Govan)
Eden, Rt. Hon. A.


Alport, C. J. M.
Buchan-Hepburn, Rt. Hon. P. G. T
Fell, A.


Amery, Julian (Preston, N.)
Bullard, D. G.
Fisher, Nigel


Anstruther-Gray, Major W. J.
Burden, F. F. A.
Fleetwood-Hesketh, R. F


Ashton, H. (Chelmsford)
Butler, Rt. Hon, R. A. (Saffron Walden)
Fletcher-Cooke, C.


Assheton, Rt. Hon. R. (Blackburn, W.)
Carr, Robert (Mitcham)
Foster, John


Astor, Hon. J. J. (Plymouth, Sutton)
Carson, Hon. E.
Gage, C. H.


Baldwin, A. E.
Cary, Sir Robert
Galbraith, T. G. D. (Hillhead)


Banks, Col. C.
Channon, H.
Garner-Evans, E. H


Barber, A. P. L.
Clarke, Col, Ralph (East Grinstead)
Godber, J. B.


Barlow, Sir John
Cole, Norman
Gomme-Duncan, Col. A.


Baxter, A. B.
Conant, Maj. R. J. E.
Gough, C. F. H.


Beach, Maj. Hicks
Cooper, Sqn. Ldr. Albert
Graham, Sir Fergus


Beamish, Maj. Tufton
Cooper-Key, E. M.
Grimond, J.


Bell, Philip (Bolton, E.)
Cranborne, Viscount
Harris, Frederic (Croydon, N.)


Bell, Ronald (Bucks, S.)
Crookshank, Capt. Rt. Hon. H. F. C.
Harris, Reader (Heston)


Bennett, F. M. (Reading, N.)
Crosthwaite-Eyre, Col. O. E.
Harrison, Col. J. H. (Eye)


Birch, Nigel
Crouch, R. F.
Harvey, Ian (Harrow, E.)


Bishop, F. P.
Crowder, Petre (Ruislip—Northwood)
Hay, John


Black, C. W.
Darling, Sir William (Edinburgh, S.)
Heald, Sir Lionel


Boothby, R. J. G
Deedes, W. F.
Heath, Edward


Bossom, A. C.
Digby, S. Wingfield
Higgs, J. M. C.


Boyd-Carpenter, J. A.
Donaldson, Cmdr. C. E. McA.
Hill, Dr. Charles (Luton)


Boyle, Sir Edward
Doughty, C. J. A.
Hill, Mrs. E. (Wythenshawe)


Braine, B. R.
Drayson, G. B.
Hinchingbrooke, Viscount


Bromley-Davenport, Lt.-Col. W. H.
Drewe, C.
Holland-Martin, C. J


Brooke, Henry (Hampstead)
Duncan, Capt. J. A. L.
Hollis, M. C.


Brooman-White, R. C.
Eccles, Rt. Hon. D. M.
Holt, A. F.







Hope, Lord John
Maydon, Lt.-Comdr S. L. C
Speir, R. M.


Hopkinson, Henry
Medlicott, Brig. F
Spence, H. R. (Aberdeenshire, W.)


Hornsby-Smith, Miss M P
Mellor, Sir John
Stanley, Capt. Hon. Richard


Horobin, I. M.
Morrison, John (Salisbury)
Stevens, G P.


Horsbrugh, Rt. Hon. Florence
Mott-Radclyffe, C. E
Storey, S.


Howard, Greville (St. Ives)
Nabarro, G. D. N
Strauss, Henry (Norwich, S.)


Hudson, Sir Austin (Lewisham, N.)
Nicholls, Harmar
Summers, G. S.


Hutchinson, Sir Geoffrey (Ilford, N.)
Nicolson, Nigel (Bournemouth E)
Sutcliffe, H.


Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Nield, Basil (Chester)
Taylor, Charles (Eastbourne)


Hyde, Lt.-Col. H. M.
Noble, Cmdr. A. H. P
Taylor, William (Bradford, N.)


Johnson, Eric (Blackley)
Oakshott, H. D.
Thomas, Rt. Hon. J. P. L. (Hereford)


Jones, A. (Hall Green)
Odey, G. W.
Thomas, P. J. M. (Conway)


Kaberry, D.
Ormsby-Gore, Hon. W D.
Thompson, Kenneth (Walton)


Kerr, H. W. (Cambridge)
Orr, Capt. L. P. S.
Thompson, Lt.-Cdr. R. (Croydon, W.)


Lambert, G.
Osborne, C.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Lambton, Viscount
Partridge, E.
Thornton-Kemsley, Col C. N.


Lancaster, Col. C. G.
Peto, Brig. C. H. M
Tilney, John


Legge-Bourke, Maj. E. A. H
Peyton, J. W. W.
Touche, Sir Gordon


Legh, P. R. (Petersfield)
Pickthorn, K. W. M.
Tweedsmuir, Lady


Lindsay, Martin
Pilkington, Capt. R. A.
Vane, W. M. F.


Linstead, H. N.
Pitman, I. J.
Vaughan-Morgan, J. K


Lloyd, Maj. Guy (Renfrew, E.)
Powell, J. Enoch
Vosper, D. F.


Lockwood, Lt.-Col. J. C.
Price, Henry (Lewisham, W.)
Wakefield, Edward (Derbyshire, W.)


Longden, Gilbert (Hens, S.W.)
Profumo, J. D.
Wakefield, Sir Wavell (Marylebone)


Lucas, Sir Jocelyn (Portsmouth, S.)
Raikes, H. V.
Walker-Smith, D. C.


Lucas, P. B. (Brentford)
Rayner, Brig. R
Ward, Hon. George (Worcester)


Lucas-Tooth, Sir Hugh
Redmayne, M.
Ward, Miss I. (Tynemouth)


McAdden, S. J.
Remnant, Hon. P.
Waterhouse, Capt. Rt. Hon. C.


Macdonald, Sir Peter (I. of Wight)
Roberts, Peter (Heeley)
Webbe, Sir H. (London &amp; Westminster)


Mackeson, Brig. H. R.
Rodgers, John (Sevenoaks)
Wellwood, W.


McKibbin, A. J.
Roper, Sir Harold
White, Baker (Canterbury)


McKie, J. H. (Galloway)
Ropner, Col. Sir Leonard
Williams, Gerald (Tonbridge)


Macmillan, Rt. Hon. Harold (Bromley)
Russell, R. S.
Williams, Sir Herbert (Croydon, E.)


Macpherson, Maj. Niall (Dumfries)
Ryder, Capt. R. E. D.
Williams, R. Dudley (Exeter)


Maitland, Patrick (Lanark)
Salter, Rt. Hon. Sir Arthur
Wills, G.


Manningham Buller, Sir R. E.
Schofield, Lt.-Col. W. (Rochdale)
Wilson, Geoffrey (Truro)


Markham, Major S. F.
Shepherd, William
Wood, Hon. R.


Marples, A. E.
Simon, J. E. S. (Middlesbrough, W.)



Marshall, Douglas (Bodmin)
Smiles, Lt.-Col. Sir Walter
TELLERS FOR THE NOES:


Marshall, Sir Sidney (Sutton)
Smithers, Peter (Winchester)
Mr. Studholme and Mr. Butcher.


Maudling, R.
Soames, Capt. C.

Clause 55.—(NATIONALISED UNDERTAKINGS)

Mr. Boyd-Carpenter: I beg to move, in page 62, line 28, at the end, to insert:
less so much thereof as is referable to liabilities incurred by the Crown under section thirty-two of the said Act of 1946.
This Amendment is designed to rectify a minor drafting error which would have deprived the National Coal Board of an element of its profit standard.

Amendment agreed to.

Clause 61.—(RETURNS AND PARTICULARS, ETC.)

The Solicitor-General: I beg to move, in page 67, line 27, at the end, to insert:
and that person shall comply with the requirement within one month from the date of the notice.
This Amendment seeks to remedy a minor defect in Clause 61, in that the Clause did not specify the period of time within which notice served on a person had to be complied with.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 67, line 43, at the end, to insert:

and
(c) the notice shall not require any return of profits or losses for, or other particulars relating to, any period ending before the first day of January, nineteen hundred and forty-seven, except such returns and particulars as are required for the purposes of the Eighth Schedule to this Act or of paragraph 8 or paragraph 11 of the Ninth Schedule to this Act.
This Amendment seeks to meet the point which was made by the right hon. and learned Member for Neepsend (Sir F. Soskice). He drew attention to the fact that there was no limit to the period for which the Inland Revenue authorities might go back in seeking information. As he knows, we had some discussion upon this in Committee. We have now sought to provide that the authorities shall not require any return of profits relating to any period ending before 1st January, 1947, except in three particular instances.
One is for the purposes of determining the net assets where the standard is based on net assets under Clause 36 (4, c), where it may be necessary to ask for the purchase price of assets bought many years ago. The second category, which is in relation to paragraph 8 of the Ninth


Schedule, deals with the spreading of profits on long-term contracts, where it may be necessary to consider contracts begun long before 1947. The third category is in relation to paragraph 11 of the same Schedule, for the application of which it will be necessary to ask for particulars of repairs carried out in the years 1940–49.

3.45 a.m.

Sir F. Soskice: I thank the right hon. and learned Gentleman for having repented of his rather nefarious purpose of taking power to require companies to make returns for their undertakings for 200 and 300 years. They still have to do that in regard to three categories of cases.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 68, line 2, to leave out from "tax," to the end of line 4.
This Amendment was tabled during the Committee stage by the hon. and learned Member for Kettering (Mr. Mitchison). Unfortunately it was not called, but he was told that if it had been it would have been accepted.

Mr. Mitchison: I thank the Solicitor-General.

Amendment agreed to.

Clause 62.—(EXTENSION OF EXCESS PROFITS LEVY TO UNINCORPORATED SOCIETIES AND OTHER BODIES.)

The Solicitor-General: I beg to move, in page 68, line 21, to leave out "and other bodies."
It might be convenient to discuss this Amendment together with the next Amendment, in line 27, to leave out from "society," to the end of line 31.
In the Committee stage the question was raised of what was meant by the expression, "and other bodies" in this Clause. The type of case envisaged was a body of trustees carrying on business; but it is not considered that this is a likely possibility, and to improve the drafting, and for clarity, I move the deletion of these words.

Amendment agreed to.

Further Amendment made: In page 68, line 27, leave out from "society" to end of line 31.

Clause 63.—(INTERPRETATION, ETC.)

The Solicitor-General: I beg to move, in page 68, line 34, at the end, to insert:
the Board of Referees" means the Board of Referees appointed for the purposes of section two hundred and eighty-seven of the Income Tax Act, 1952.
This Amendment is necessary in view of the Amendment made to Clause 52, where we referred to the Board of Referees, and we now have to relate it to Section 287 of the Income Tax Act, 1952.

Mr. E. Fletcher: I was hoping that the learned Solicitor-General would not merely move the Amendment, but would explain it. It is only a few moments ago that the hon. and learned Gentleman was accusing my hon. and learned Friend the Member for Kettering (Mr. Mitchison) of speaking disparagingly of the Board of Referees. In view of that, surely he will tell us something about this Board. I gather that it is a body which was set up to deal with the Excess Profits Tax years ago. Has it been functioning since that Act lapsed?
The Amendment says that in that Section "Board of Referees" means a Board of Referees appointed for the purpose of the Section by the Treasury. The effect of the definition is that the Board of Referees under the Bill means a Board of Referees appointed for the purposes of a Section of another Measure. Is there an existing Board of Referees? If so, who is the chairman? Or is it intended to appoint a new Board of Referees to deal with Clause 52? Is the Board of Referees an administrative tribunal or a court of law? Does it sit in public or in private? Is there an appeal from it as from the General or Special Commissioners on a point of law to the law courts? May we know something about the machinery with which the Board will function?

Amendment agreed to.

The Solicitor-General: I beg to move, in page 69, line 25, to leave out from "1948," to "shall," in line 26, and to insert:
and the amount of any premiums shown in the accounts of any other body corporate as


having been received by it on the issue of any of its share capital.
The Amendment is connected with the next three Amendments which it would be convenient to discuss at the same time.
The Clause as drafted did not cover statutory companies such as water companies or unregistered companies, and my hon. and learned Friend the Member for Ilford, North (Sir G. Hutchinson) drew attention to this during the Committee stage. The Clause also referred to Section 56 of the Companies Act.
The Amendments seek to extend the treatment given under the Clause to share premiums shown in accounts of companies not governed by the Companies Act, 1948, who therefore have no share premium account under Section 56 of the Act. It is achieved by defining "company" so as to cover only companies registered in Great Britain and omitting certain provisions in relation to other bodies corporate.

Amendment agreed to.

Further Amendments made: In page 69, line 28, after "company," insert "or other body corporate."

In line 31, leave out from beginning, to "shall," in line 32.

In line 34, at end, insert:
In this subsection 'company' means a company within the meaning of section four hundred and fifty-five of the Companies Act, 1948."—[The solicitor-General]

Clause 66.—(AMENDMENT, AND EXTENSION TO EXCESS PROFITS LEVY, OF PROVISIONS AS TO AVOIDANCE OF LIABILITY TO TAX.)

The Solicitor-General: I beg to move, in page 72, line 36, to leave out "making of," and to insert:
date on which the said Bill was ordered by that House to be printed with.
My hon. and learned Friend the Member for Kensington, South (Sir P. Spens) commented during the Committee stage on that part of subsection (1) which allowed
… the provisions of the Bill for this Act, and any amendments made therein before the passing thereof …
to be retrospective to the date of the introduction of the Bill or the making of the Amendments, as the case might be. His comment was to the effect that it really would be extremely difficult to

determine on what date the Amendments were passed. We thought there was considerable force in that observation, and, while it would clearly be wrong to make the whole of the Bill as amended retrospective to the date of the introduction of the Bill in its original form—because that might prejudice and penalise innocent transactions—it is also essential that the Amendments made in the Bill should have a retrospective effect.
Therefore, for the purpose of clarity in this rather unusual situation, we are making the Bill retrospective to the date when the Bill was ordered to be printed with the Amendments. As everyone knows, it is necessary only to look on the outside of a Bill to see the date when that particular copy was ordered to be printed, and that will determine the date to which the Amendments contained in the Bill are retrospective. I think that gets us out of a rather considerable difficulty.

Amendment agreed to.

Clause 68.—(EXEMPTION FROM ESTATE DUTY FOR MEMBERS OF ARMED FORCES, ETC.)

Mr. Boyd-Carpenter: I beg to move, in page 76, line 3, after "when," to insert:
the following conditions were satisfied, that is to say, that.
This Amendment, which I would suggest might be taken with that in my right hon. Friend's name in page 76, line 14, deals with a point which was raised by the hon. Member for Northfield (Mr. Chapman) in Committee.
The point was an important one, to which we have given careful consideration, as to whether it should not be possible to include in the concession on Estate Duty the case of a man who dies as a result of the aggravation of his disease due to war service under the specified active service conditions. On consideration, we thought it right to include such a person in the immunity given by the Clause.

4.0 a.m.

Mr. Chapman: I should like to thank the Financial Secretary for proposing this Amendment. It does very substantially meet the point I put in Committee, when taken with the Amendment in page 76, line 14. It is rather strange that the


Financial Secretary has accepted the Amendment which he opposed in the Committee stage, but seems to have rejected the Amendment to which he gave a bit more of a blessing. While I think this is a good concession, I think it is inadequate for these reasons. The Chancellor has extended the ability to claim exemption from Death Duties when death is due to aggravation of a disease contracted prior to a man joining the Forces.
I wonder whether he has considered what the result will be? It means, as the Clause stands when the Amendment is accepted, that the Secretary of State for War, for example, is put in the position of judging not only when a man dies of a wound and his executors claim exemption, but when a man dies of disease that existed before and has now been aggravated. I think this is going to land the Treasury in a great deal of difficulty, because the Minister will have to decide a very great deal.
Let me give an example. What does the Minister have to consider in a case of aggravation? He has to collect proof that the disease existed before and he has to sift all the evidence of whether that disease did exist before or not. He has to question the doctor who attended the deceased before he went into the Services.

Mr. Deputy-Speaker (Mr. Hopkin Morris): It seems to me that the hon. Gentleman is directing his remarks now to the first Amendment standing in his name instead of to the Amendment now before the House.

Mr. Chapman: We are on the Chancellor's Amendments to lines 3 and 14. To continue what I was saying, I am trying to suggest that, in admitting the principle of aggravation, the Chancellor is in fact laying up a store of trouble for himself. He is doing it without laying down the procedure by which the Minister's decision can be taken, and it will be awkward if it is claimed that the man's disease existed before he went into the Forces and the Minister says it did not.

There will be medical evidence, and there will be a whole lot of argument on it. I should have thought that the Chancellor could have come forward not only with this Amendment but with another one, which the Financial Secretary spoke reasonably well of in Committee, setting up a tribunal——

Mr. Boyd-Carpenter: On a point of order. The hon. Gentleman is now addressing his arguments to a point which may arise on his Amendment in page 76, line 20, which, in your discretion Mr. Deputy-Speaker, may or may not be called. But this does not arise on these Amendments, which relate solely to aggravation.

The Deputy-Speaker: Yes, the hon. Member is directing his remarks to that Amendment, and that Amendment is out of order.

Mr. Chapman: Having put the point to the Financial Secretary, perhaps he will deal with it at a later stage. I wish to thank him for accepting the principle of aggravation, which I think goes a long way to meet the points raised on both sides in Committee.

Amendment agreed to.

Further Amendment made: In page 76, line 14, at end, insert:
or that the deceased died from a disease contracted at some previous time, the death being due to or hastened by the aggravation of the disease during a period (whether beginning before, on or after the said twelfth day of March) when the deceased satisfied the conditions aforesaid."—[Mr. Boyd-Carpenter.]

First Schedule.—(SECOND SCALE OF ENTERTAINMENTS DUTY.)

Mr. Boyd-Carpenter: I beg to move, in page 81, line 2, at the end, to insert:

"PART I."

This is consequential upon an Amendment carried as long ago as on Clause 2.

Amendment agreed to.

Amendment proposed: In page 81, line 13, at end, insert:




"PART II


THIRD SCALE OF ENTERTAINMENTS DUTY


5
1. Where the amount of the payment, excluding the amount of duty, is an amount mentioned in the following Table, the rate of duty shall be the amount therein specified in relation to that payment.


TABLE


10
Amount of payment, excluding amount of duty.
Rate of duty.
Amount of payment, excluding amount of duty.
Rate of duty.
Amount of payment, excluding amount of duty.
Rate of duty.



s.
d.

s.
d.

s.
d.

s.
d.

s.
d.

s.
d.





8
½


½
2
3
½
1
10
½
4
0
¾
3
6
¼




9


l

2
4

1
11

4
1
¼
3
6
¾


15

9
½

1
¼
2
4
¼
1
11

4
2

3
7





10


2

2
5

2
0

4
2
1/2
3
7
½




10
½

2
½
2
5
¼
2
0
¾
4
3

3
8





10
¾

3
¾
2
5
¾
2
1
¼
4
3
½
3
8
½




11


4

2
6
¼
2
1
¾
4
4

3
9



20

11
1/2

4
½
2
6
¾
2
2
¼
4
4
1/2
3
9
½




11
¾

5
¼
2
7

2
3

4
4
¾
3
10
1/4



1
0


6

2
7
½
2
3
½
4
5
¾
3
10
3/4



1
0
½

6
½
2
8

2
4

4
5
¼
3
11
¼



1
0
3/4

7
¼
2
8
½
2
4
½
4
6

4
0



25
1
1


8

2
9

2
5

4
6
½
4
0
½



1
1
½

8
½
2
9
¼
2
5
½
4
7

4
l




1
1
¾

9
¼
2
10

2
6

4
7
½
4
1
½



1
2


10

2
10
1/2
2
6
½
4
8

4
2




1
2
¼

10
¾
2
11

2
7

4
8
½
4
2
½


30
1
3


11

2
11
½
2
7
½
4
9

4
3




1
3
¾

11
1/2
3
0

2
8

4
9
½
4
3
½



1
1
½

11
1/2
3
0
½
2
8
½
4
10

4
4




1
5

1
0

3
l

2
9

4
10
½
4
4
½



1
5
½
1
0
½
3
1
½
2
9
½
4
11

4
5



35
1
6

1
l

3
2
¼
2
9
¾
4
11
½
4
5
½



1
6
¾
1
1
¼
3
3

2
10

5
0

4
6




1
7
½
1
1
½
3
3
¾
2
10
¼
5
0
¾
4
6
¼



1
8

1
2

3
4
½
2
10
½
5
1
½
4
6
¼



1
8
½
l
2
½
3
5
1/4
2
10
¾
5
1
¼
4
7
¼


40
1
9

1
3

3
6

2
11

5
2
½
4
7
½



1
9
½
1
3
½
3
6
1/2
2
11
1/2
5
3

4
8




1
10

1
4

3
7

3
0

5
3
½
4
8
½



1
10
¼
1
4
3/4
3
7
1/2
3
0
½
5
4
1/4
4
8
¾



1
10
¾
1
5
¼
3
7
¾
3
1
¼
5
4
¾
4
9
¼


45
1
11

1
6

3
8
1/4
3
1
¾
5
5
¼
4
9
¾



1
11
½
1
6
½
3
8
¾
3
2
¼
5
6

4
10




2
0

1
7

3
9

3
3

5
6
½
4
10
½



2
0
¼
1
7
¾
3
9
½
3
3
½
5
7

4
11
½



2
0
¾
1
8
¼
3
10

3
4

5
7
½
4
11
½


50
2
1

1
9

3
10
½
3
4
½
5
8

5
0




2
1
½
1
9
½
3
11

3
5

5
8
½
5
0
½



2
2
¼
1
9
½
3
11
½
3
5
½
5
9

5
l




2
3

1
10

4
0

3
6

5
9
½
5
1
½



5
10

5
2

6
2
1/4
5
4
¾
6
6
½
5
6
½


55
5
10
½
5
2
½
6
3

5
5

6
6
¾
5
7
¼



5
11

5
3

6
3
¾
5
5
¼
6
7

5
8




5
11
½
5
3
½
6
4
½
5
5
¼
6
7
½
5
8
½



6
0

5
4

6
5
¼
5
5
¾
6
7
¾
5
9
¼



6
0
¾
5
4
¼
6
6

5
6

6
8

5
0



60
6
1
½
5
4
½















2. Where the amount of the payment, excluding the amount of duty, is an amount not specified in the foregoing Table, and exceeds eightpence but does not exceed six shillings and eightpence, the rate of duty shall be the same as on a payment of the next higher amount specified in the Table.


65
3. Where the amount of the payment, excluding the amount of duty, exceeds six shillings and eightpence, the rate of duty shall be five shillings and tenpence increased by a halfpenny for every halfpenny or part of a halfpenny by which the amount of the payment exceeds six shillings and eightpence."—[Mr. Boyd-Carpenter.]

Amendment proposed to the proposed Amendment: In line 13, columns 1, and 2, leave out "8½ … ½."—[Mr. H. Wilson.]

Question put, "That '8½ … ½' stand part of the proposed Amendment."

The House divided: Ayes, 201; Noes, 190.

Division No. 178.]
AYES
[4.7 a.m.


Allan, R. A. (Paddington, S.)
Graham, Sir Fergus
Orr, Capt. L. P. S


Alport, C. J. M.
Harris, Frederic (Croydon, N)
Osborne, C.


Amery, Julian (Preston, N.)
Harris, Reader (Heston)
Partridge, E.


Anstruther-Gray, Major W. J
Harrison, Col. J. H. (Eye)
Peto, Brig. C. H M


Ashton, H. (Chelmsford)
Harvey, Ian (Harrow, E.)
Peyton, J. W. W.


Assheton, Rt. Hon. R. (Blackburn, W.)
Hay, John
Pickthorn, K. W. M.


Astor, Hon. J. J. (Plymouth, Sutton)
Heald, Sir Lionel
Pilkington, Capt. R A.


Baldwin, A. E.
Heath, Edward
Pitman, I. J.


Banks, Col. C.
Higgs, J. M. C.
Powell, J. Enoch


Barber, A. P. L.
Hill, Dr. Charles (Luton)
Price, Henry (Lewisham, W.)


Barlow, Sir John
Hill, Mrs. E. (Wythenshawe)
Profumo, J. D.


Baxter, A. B.
Hinchingbrooke, Viscount
Raikes, H. V.


Beach, Maj. Hicks
Holland-Martin, C. J.
Rayner, Brig. R


Beamish, Maj Tufton
Hollis, M. C.
Redmayne, M.


Bell, Philip (Bolton, E.)
Hope, Lord John
Remnant, Hon. P.


Bell, Ronald (Bucks, S.)
Hopkinson, Henry
Roberts, Peter (Heeley)


Bennett, F. M. (Reading, N.)
Hornsby-Smith, Miss M. P.
Rodgers, John (Sevenoaks)


Birch, Nigel
Horobin, I. M.
Roper, Sir Harold


Bishop, F. P.
Horsbrugh, Rt. Hon. Florence
Ropner, Col. Sir Leonard


Brack, C. W.
Howard, Greville (St. Ives)
Russell, R. S.


Boothby, R. J. G.
Hudson, Sir Austin (Lewisham, N.)
Ryder, Capt. R. E. D.


Bossom, A. C.
Hutchinson, Sir Geoffrey (Ilford, N.)
Salter, Rt. Hon. Sir Arthur


Boyd-Carpenter, J. A
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Schofield, Lt.-Col. W. (Rochdale)


Boyle, Sir Edward
Hyde, Lt.-Col. H. M.
Shepherd, William


Braine, B. R.
Johnson, Eric (Blackley)
Simon, J. E. S. (Middlesbrough, W.)


Bromley-Davenport, Lt.-Col. W. H.
Jones, A. (Hall Green)
Smiles, Lt.-Col. Sir Waller


Brooke, Henry (Hampstead)
Kaberry, D.
Smithers, Peter (Winchester)


Brooman-White, R. C.
Kerr, H. W. (Cambridge)
Soames, Capt. C.


Browne, Jack (Govan)
Lambert, Hon. G.
Speir, R. M.


Buchan-Hepburn, Rt. Hon. P. G. T.
Lambton, Viscount
Spence, H. R. (Aberdeenshire, W.)


Bullard, D. G.
Lancaster, Col. C. G.
Stanley, Capt. Hon. Richard


Burden, F. F. A.
Legge-Bourke, Maj. E. A. H.
Stevens, G. P.


Butcher, H. W.
Legh, P. R. (Petersfield)
Storey, S.


Butler, Rt. Hon. R. A. (Saffron Walden)
Lindsay, Martin
Strauss, Henry (Norwich, S.)


Carr, Robert (Mitcham)
Linstead, H. N.
Studholme, H. G.


Carson, Hon. E.
Lloyd, Maj. Guy (Renfrew, E.)
Summers, G. S.


Cary, Sir Robert
Lockwood, Lt.-Col. J. C.
Sutcliffe, H.


Channon, H.
Longden, Gilbert (Herts, S.W)
Taylor, Charles (Eastbourne)


Clarke, Col. Ralph (East Grinstead)
Lucas, Sir Jocelyn (Portsmouth, S.)
Taylor, William (Bradford, N.)


Cole, Norman
Lucas, P. B. (Brentford)
Thomas, Rt Hon. J. P L (Hereford)


Conant, Maj. R. J. E.
Lucas-Tooth, Sir Hugh
Thomas, P J. M. (Conway)


Cooper, Sqn. Ldr. Albert
McAdden, S. J.
Thompson, Kenneth (Walton)


Cooper-Key, E. M.
Macdonald, Sir Peter (I. of Wight)
Thompson, Lt.-Cdr. R. (Croydon, W.)


Cranborne, Viscount
Mackeson, Brig. H. R.
Thorneycroft, Rt. Hn. Peter (Monmouth)


Crookshank, Capt. Rt. Hon. H. F. C.
McKibbin, A. J.
Thornton-Kemsley, Col C. N.


Crosthwaite-Eyre, Col. O. E
McKie, J. H. (Galloway)
Tilney, John


Crouch, R. F.
Macmillan, Rt. Hon. Harold (Bromley)
Touche, Sir Gordon


Crowder, Petre (Ruislip—Northwood)
Macpherson, Maj. Niall (Dumfries)
Tweedsmuir, Lady


Darling, Sir William (Edinburgh, S.)
Maitland, Patrick (Lanark)
Vane, W. M. F.


Deedes, W. F.
Manningham-Buller, Sir Reginald
Vaughan-Morgan, J. K.


Digby, S. Wingfield
Markham, Major S. F.
Wakefield, Edward (Derbyshire, W.)


Donaldson, Cmdr. C. E. McA.
Marples, A E.
Wakefield, Sir Wavell (Marylebone)


Doughty, C. J. A.
Marshall, Douglas (Bodmin)
Walker-Smith, D. C.


Drayson, G. B.
Marshall, Sir Sidney (Sutton)
Ward, Hon. George (Worcester)


Duncan, Capt. J. A. L.
Maudling, R.
Ward, Miss I. (Tynemouth)


Eccles, Rt. Hon. D. M
Maydon, Lt.-Comdr. S. L. C.
Waterhouse, Capt. Rt. Hon C.


Eden, Rt. Hon. A
Medlicott, Brig. F.
Webbe, Sir H. (London &amp; Westminster)


Fell, A.
Mellor, Sir John
Wellwood, W.


Fisher, Nigel
Morrison, John (Salisbury)
White, Baker (Canterbury)


Fleetwood-Hesketh, R. F.
Mott-Radclyffe, C. E.
Williams, Gerald (Tonbridge)


Fletcher-Cooke, C
Nabarro, G. D. N.
Williams, Sir Herbert (Croydon, E.)


Foster, John
Nicholls, Harmar
Williams, R. Dudley (Exeter)


Gage, C. H.
Nicolson, Nigel (Bournemouth, E.)
Wills, G


Galbraith, T. G. D. (Hillhead)
Nield, Basil (Chester)
Wilson, Geoffrey (Truro)


Garner-Evans, E. H.
Noble, Cmdr. A. H. P.
Wood, Hon. R.


Godber, J. B.
Oakshott, H. D.



Gomme-Duncan, Col. A.
Odey, G. W.
TELLERS FOR THE AYES:


Gough, C. F. H.
Ormsby-Gore, Hon. W. D
Mr. Drewe and Mr. Vosper.




NOES


Acland, Sir Richard
Gibson, C. W.
Oswald, T


Adams, Richard
Glanville, James
Padley, W. E.


Albu, A. H.
Gordon Walker, Rt. Hon. P. C.
Paling, Will T. (Dewsbury)


Allen, Scholefield (Crewe)
Greenwood, Anthony (Rossendale)
Pannell, Charles


Attiee, Rt. Hon. C. R.
Grey, C. F.
Pargiter, G A


Awbery, S. S.
Griffiths, David (Rother Valley)
Paton, J.


Bacon, Miss Alice
Griffiths, William (Exchange)
Pearson, A.


Baird, J.
Grimond, J.
Pearl, T. F.


Barnes, Rt. Hon. A J
Hale, Leslie (Oldham, W.)
Plummer, Sir Leslie


Bence, C. R.
Hall, John (Gateshead, W.)
Popplewell, E.


Benn, Wedgwood
Hamilton, W. W.
Price, Joseph T. (Westhoughton)


Benson, G.
Hannan, W.
Price, Philips (Gloucestershire W.)


Beswick, F.
Hargreaves, A.
Proctor, W. T.


Bing, G. H. C.
Hayman, F. H.
Rankin, John


Blackburn, F.
Healey, Denis (Leeds, S.E.)
Reid, Thomas (Swindon)


Blenkinsop, A.
Henderson, Rt. Hon. A. (Rowley Regis)
Rhodes, H.


Blyton, W. R.
Herbison, Miss M.
Robens, Rt. Hon. A.


Boardman, H.
Hobson, C. R
Roberts, Albert (Normanton)


Bottomley, Rt. Hon. A. G.
Holt, A. F.
Roberts, Goronwy (Caernarvonshire)


Bowden, H. W.
Houghton, Douglas
Robinson, Kenneth (St. Pancras, N.)


Braddock, Mrs. Elizabeth
Hoy, J. H.
Rogers, George (Kensington, N)


Brockway, A. F.
Hudson, James (Ealing, N.)
Ross, William


Brook, Dryden (Halifax)
Hughes, Cledwyn (Anglesey)
Royle, C.


Broughton, Dr. A. D. D.
Hughes, Emrys (S. Ayrshire)
Schofield, S. (Barnsley)


Brown, Rt. Hon. George (Belper)
Hughes, Hector (Aberdeen, N.)
Shinwell, Rt. Hon E.


Burton, Miss F. E.
Hynd, H. (Accrington)
Short, E. W.


Butler, Herbert (Hackney, S.)
Hynd, J. B. (Attercliffe)
Shurmer, P. L. E.


Callaghan, L. J.
Irving, W. J. (Wood Green)
Silverman, Julius (Erdington)


Castle, Mrs. B. A.
Jay, Rt. Hon. D. P. T.
Simmons, C. J. (Brierley Hill)


Chapman, W. D.
Jenkins, R. H. (Stechford)
Slater, J.


Chetwynd, G. R.
Johnson, James (Rugby)
Snow, J. W.


Clunie, J.
Johnston, Douglas (Paisley)
Sorensen, R. W.


Collick, P. H.
Jones, David (Hartlepool)
Soskice, Rt. Hon Sir Frank


Corbet, Mrs. Freda
Jones, Frederick Elwyn (West Ham, S.)
Sparks, J. A.


Craddock, George (Bradford, S.)
Jones, Jack (Rotherham)
Stewart, Michael (Fulham, E.)


Daines, P.
Jones, T. W. (Merioneth)
Swingler, S. T.


Dalton, Rt. Hon. H.
Keenan, W.
Taylor, John (West Lothian)


Darling, George (Hillsborough)
King, Dr. H. M.
Taylor, Rt. Hon. Robert (Morpeth)


Davies, A. Edward (Stoke, N.)
Lee, Frederick (Newton)
Thomas, David (Aberdare)


Davies, Ernest (Enfield, E.)
Lever, Leslie (Ardwick)
Thomas, George (Cardiff)


Davies, Harold (Leek)
Lewis, Arthur
Thomas, Iorwerth (Rhondda, W.)


Davies, Stephen (Merthyr)
Lindgren, G. S.
Ungoed-Thomas, Sir Lynn


de Freitas, Geoffrey
MacColl, J. E.
Wallace, H. W.


Deer, G.
McGovern, J.
Watkins, T. E.


Delargy, H. J.
McInnes, J.
Weitzman, D.


Dodds, N. N.
McKay, John (Wallsend)
Wells, Percy (Faversham)


Donnelly, D. L.
McLeavy, F.
Wells, William (Walsall)


Dugdale, Rt. Hon. John (W. Bromwich)
MacPherson, Malcolm (Stirling)
West, D. G.


Ede, Rt. Hon. J. C.
Mallalieu, J. P. W. (Huddersfield, E.)
Wheatley, Rt. Hon. John


Edwards, John (Brighouse)
Mann, Mrs. Jean
White, Mrs. Eirene (E. Flint)


Evans, Albert (Islington, S.W.)
Manuel, A. C.
Whiteley, Rt. Hon. W.


Evans, Edward (Lowestoft)
Marquand, Rt. Hon. H. A
Willey, Frederick (Sunderland, N.)


Evans, Stanley (Wednesbury)
Mayhew, C. P.
Willey, Octavius (Cleveland)


Ewart, R.
Mellish, R. J.
Williams, Rev. Llywelyn (Abertillery)


Fernyhough, E.
Mitchison, G. R
Williams, Ronald (Wigan)


Field, W. J.
Moody, A. S.
Williams, W. R. (Droylsden)


Finch, H. J.
Morley, R.
Williams, W. T. (Hammersmith, S.)


Fletcher, Eric (Islington, E.)
Mort, D. L.
Wilson, Rt. Hon Harold (Huyton)


Foot, M. M.
Moyle, A.
Winterbottom, Ian (Nottingham, C.)


Forman, J. C.
Mulley, F. W
Wyatt, W. L.


Fraser, Thomas (Hamilton)
Murray, J. D.
Yates, V. F.


Freeman, John (Walford)
Nally, W.
Younger, Rt. Hon K.


Freeman, Peter (Newport)
Noel-Baker, Rt. Hon. P. J
TELLERS FOR THE NOES:


Gaitskell, Rt. Hon. H T. N.
Orbach, M
Mr. Wilkins and Mr. Wigg.

Proposed Amendment agreed to.

Fourth Schedule.—(PURCHASE TAX: PRESCRIBED LISTS FOR WEARING APPAREL AND FOR CLOTH, ETC.)

4.15 a.m.

Mr. H. Wilson: I beg to move, in page 83, line 21, at the end, to insert:
the expression 'supplied as public service uniforms' means clothing supplied to the order of local authorities (including police authorities), public passenger transport undertakings and British Railways, for issue

to members of their staff in accordance with the terms and conditions of their employment.
If you agree, Mr. Deputy-Speaker, I think it might be convenient to the House if in the discussion on this Amendment we were to deal with all the Amendments to this Schedule relating to public service uniform.

Mr. Deputy-Speaker: I think it will be convenient to the House if all these Amendments are taken together.

Mr. Wilson: I do not propose to detain the House long, and I certainly do not intend to argue the case for individual D levels for the particular items of clothing which feature in the Amendments. I am more concerned to establish the general argument about the exemption from Purchase Tax of these items, and I can certainly promise the House that I do not intend to stage a mannequin parade on this occasion.
The point of these Amendments is that the D scheme—I do not think the Chancellor had this in mind when he introduced the scheme—does, in fact, impose tax on certain public service uniforms where no taxation existed before. It is true, of course, that railway uniforms to a considerable extent did carry Purchase Tax before, and to that extent the D scheme does represent some improvement. But a large part of the police and fire brigade uniforms, and more particularly the uniforms of road passenger transport undertakings, were within the Utility scheme, and now, because of the operation of the D scheme, they will be subject to Purchase Tax.
It is a fact also that they will be subject to Purchase Tax at a fairly high level, because many of these items are made of heavy and expensive cloth which carries them a long way above the median D figure fixed on entirely different bases in accordance with the system explained to us in Committee by the Minister of State for Economic Affairs, whose absence from these debates we have very much regretted. I agree that he has in fact been present, but we regret that he has not intervened in the debates to any large extent.
I know it may be argued—because I have already heard the views of the Treasury on this question, as I have taken it up with the Treasury—that there is no net loss to the public in all this because these uniforms largely involve public funds, and to some extent it is a transfer out of one pocket into another; but I must point out to the Financial Secretary that, of course, while there is a State grant for the purposes of police forces and fire brigades, there is still a large part of the expense of police forces and fire brigades—just to mention two cases covered by the Amendments—which involves local rates. Therefore, the introduction of this scheme may

potentially affect local rates in many parts of the country.
I would point out that a considerable sum of money is involved on road passenger transport undertakings, and, therefore, this increased tax will increase the cost of passenger transport, which, presumably, will mean increased fares. So far as railway uniforms are concerned, as I have said, there is not likely to be an increase in tax in general, but of course, if the Government were to accept the Amendment—as, I hope, they will—it would mean a reduction in the amount of tax paid by the British Transport Commission, which would ease its position either as regards fares or as regards its annual balance sheet, or possibly both.
I want to deal with another question which I know is very much in the mind of the Treasury. It feels—as I know, because the Chancellor has told me this—the difficulty of defining essential uniforms. I quite agree that even if we could define uniforms in general, it would be a mistake to exempt them generally from the field of Purchase Tax by the device embodied in these Amendments. I do not think that the House would particularly want to exempt from Purchase Tax, for instance, commissionaires at cinemas or private chauffeurs, but I think that the House probably would want to exempt—or, at any rate, some hon. Members would want to exempt—the uniforms supplied by some of the public service undertakings.
I agree that the definition that we have put in the Amendment may not be entirely perfect. It has been pointed out, for example, that it does not cover gas, electricity and water undertakings, but I would suggest to the Financial Secretary, since the purpose of these Amendments is to establish the principle, that if the Chancellor will accept the principle of the proposal he will find it not difficult to define on the lines of the Amendment immediately before us—and define it to his satisfaction and perhaps, on a rather wider basis—in a forthcoming Treasury Order, which could give effect to what we are now proposing.
I feel that if the hon. Gentleman would examine this proposal he would find that there is a very strong case for it. The application of the D figure based on this median sampling we have heard so much


about applies very badly to some of these public service uniforms. It is a fact that, whereas the median price for jackets may be reasonable, police jackets, which have to have a material specially prescribed by the Home Office, and some of the transport jackets, involve a much heavier cloth than is worn for ordinary purposes, as well as being strengthened with leather, and so on. This means that the median fixed for general purposes is not really applicable for this.
I hope the Government will accept the principle of these Amendments and give effect to them by a series of Amendments of their own, prescribing a new and appropriate D level, if the present Amendments are not satisfactorily drafted.

Mr. Pannell: When one is considering public service uniforms, I suppose that one should include the uniforms of the mayor, town clerk, and mace-bearer, but it goes to prove how modest we are that we have not put those in. [Interruption.] I am speaking about the mayor's uniform, and I do not know what the hon. Member for Croydon, East (Sir H. Williams) is muttering about. The robe alone cost about £75 before the war, and that was an item to be considered in the poorer boroughs. I do not know if Croydon is one of those.
When one looks at the local rates for this year, 1952–53—an average of 21s. for county boroughs, 18s. 4d. for Metropolitan boroughs, 21s. 1d. for non-county boroughs, and 21s. for urban districts—it should be remembered that the fact that the D level is not high enough will have its effect on the local rates. It is a fact that about 70 per cent. of local rates are paid in staff wages and salaries, and on top of this we have increased staff uniform costs.
Local authorities, as good employers, will not be concerned only with the items mentioned in this Amendment. There is the borough surveyor's department, for example, needing everything from boiler suits to duffle coats; and today library assistants have a kind of uniform, all helping to make inroads into a local authority's expenditure.
I do not know whether I am in order in referring to outsizes; but earlier there was a disputation between the hon. Mem-

ber for Brighouse and Spenborough (Mr. J. Edwards) and the Chancellor, who thought we were trying to be ungenerous. But the Government never seem to have awakened to this question of outsizes.

Mr. Deputy-Speaker: That is not within the scope of the Amendment.

Mr. Pannell: With respect, I want to suggest that when considering policemen's uniforms one has to consider outsizes; and the point surely is made here on the basis that allowances were made under the old Utility scheme. The Government never awakened to the idea until we on this side raised it on a previous Amendment in Committee, and I should like to refer to what the Chancellor said to my hon. Friend the Member for Dartford (Mr. Dodds) when he asked a Question about outsizes on 25th March last. The right hon. Gentleman said:
I fear that the suggestion that there should be separate D allowances for outsize garments and those of especial dimensions would unduly expand the scheme."—[OFFICIAL REPORT, 25th March, 1952; Vol. 498, c. 26.]
He turned it down.

4.30 a.m.

Mr. Deputy-Speaker: I do not think the hon. Member can pursue that.

Mr. Pannell: I shall not pursue it any further, because I have made my point. I should have thought that of all times when one could discuss the question of outsizes, it would have been on the subject of uniforms for the police. We are asking for an exemption and we are arguing upon the basis that more cloth is needed, and nobody would suggest that the price of policemen's uniforms is not governed somewhat by the size of the people who get inside them.
For all those reasons, we suggest that this is another impost upon the local authorities. It will have a reflection in the rates figure, which it will cause to go up and up. It will have its reflection on bus fares, as has been suggested, and it will affect the cost of the fire brigades. I can remember being a member of a fire brigade committee, and the mere fact that fire brigades went back from nationalisation to the local authorities meant another 10d. on the rates; and that sort of process is continuing.
Firemen are complaining that they should have an increase in wages. I should be out of order if I discussed the


standstill order; but it caused a lot of trouble here. But there is to be no standstill order upon the costs incurred by local authorities and the effect on the rates figure, which has almost caused a crisis in local authorities' affairs. As some small protest against that process, I support the Amendment.

Captain Duncan: The right hon. Member for Huyton (Mr. H. Wilson) obtained your agreement, Mr. Hopkin Morris, that all the Amendments on page 1828 of the Order Paper should be discussed together. I want very briefly to refer to one of them.

Mr. Boyd-Carpenter: Perhaps I could clarify your Ruling, Mr. Deputy-Speaker. As I understand the question of the Amendments on page 1828, the only ones which are being taken at this stage are those in the name of the right hon. Member for Huyton (Mr. H. Wilson).

Mr. Deputy-Speaker: The ones to be taken are the ones on page 1826 and the two standing in the name of the right hon. Member for Huyton (Mr. H. Wilson) on page 1828.

Captain Duncan: The point of my argument is that we are dealing with public service uniforms or parts of public service uniforms, and an undertaking was given by the Minister of State in these words when I moved a similar Amendment in Committee——

Mr. Deputy-Speaker: The hon. Member is not in order in discussing his own Amendment in page 1828. He must discuss the Amendment moved by the right hon. Member for Huyton.

Mr. A. G. Bottomley: I rise to make one additional point which has not been discussed. I agree with the observation made by my right hon. and hon. Friends about saving the ratepayers' money. We do not want to inflict additional burdens on local authorities and those who pay the rates.
In regard to local authority employees, it is well known that, in calculating their wages and conditions of service, the cost of uniforms is taken into account. If this additional tax is put on and further wage negotiations take place in view of the rise in the cost of living, if public employees are told that they cannot have a

further increase in their wages because of this tax, I think the Chancellor will agree that that would be an injustice. I ask him to give consideration to that point.

Mr. Boyd-Carpenter: As the right hon. Gentleman, the Member for Huyton (Mr. Wilson) said, he wrote to my right hon. Friend on this subject. Actually the series of Amendments in his name do not in form, at any rate, exempt these items from Purchase Tax. All that they seek to do is to set for these specified items a very much higher D—about twice the level of that for comparable articles not contained in these Amendments. It is important that we should be clear that what we are debating is not necessarily exemption of these uniforms but giving to them a much higher D than is given to comparable articles. I think it is clear that what he had in mind was exemption, though it is clear that his Amendments do not completely effect that, even in practice.
There are many difficulties in the way of this proposal. As the right hon. Gentleman knows, it is contrary to the Purchase Tax scheme to arrange the tax on the basis of the ultimate use of the article. Again and again it has been said that it would be impossible to work the scheme on the basis that special concessions were allowed because articles subjected to the tax were, or might be, used for some particularly admirable purpose. The difficulties of administration are obvious. For that reason, the late Government resisted pleas of this character with a blank refusal.

Mrs. White: In what category did it put fishermen's oilskin clothing? Was that not put into a special category?

Mr. Boyd-Carpenter: It sounds like a remarkably special category. It is not in this Amendment. The right hon. Gentleman has misapprehended the effect on these articles of the changes effected by the Chancellor's proposals. Before the Budget many of these articles paid Purchase Tax at the full rate. The effect of the proposals, in respect of uniforms generally, has been to reduce the tax on them. Therefore, the right hon. Member's proposal comes forward at an inapposite time when the burden previously imposed by the Purchase Tax


has been reduced, though not in the discriminating way which he suggests, but in the more satisfactory way of general treatment of the categories concerned.
It is one of the merits of the Chancellor's proposals that a number of uniforms, for instance, those of the Services, for which previously it was not possible to find any Utility range and which therefore paid the full tax, have been given a D and secure some reduction of tax. The right hon. Gentleman has selected a highly discriminatory list. It is curious that if there is a case for exempting uniforms he should pick out the things mentioned in list and exclude others.
If uniforms are to be given special treatment above what they have already, why are the uniforms of the Services not to be dealt with on the same level as those of the local authorities? Why should certain of the uniforms of local authorities have special treatment, while others, such as those of firemen, are not to be given such benefit? I understand from what he has said that he had in mind, not the interest of the wearers of the uniforms, but the financial interests of the local authorities which employ them.
That raises a different issue. We are not being very strongly pressed about the interests of the wearers of the uniforms. In many cases that would not be a strong point, because the uniforms are provided by their employers. But we are now told that the local authorities should be relieved of the tax on the uniform when they provide it. That seems to raise a considerable question of principle, whether, in general, local authorities should be exempted from forms of taxation—a very serious question.
It is the wrong way to handle the problem. A most elaborate system was worked out under the late Government for the assistance of local authorities in financial difficulties under the Equalisation Grants procedure. I suggest to right hon. Gentlemen who put the scheme into operation that that is the medium for handling this problem. To give a special tax exemption to a limited sphere of uniforms, not even for the benefit of the wearers but for the financial benefit of the local authorities employing them, seems an extraordinary argument.

Mr. Bottomley: The wearers are affected because the uniforms become part of their wages and conditions of service. When a claim is made in due course to meet the increased cost of living, the fact that uniforms cost more will weigh against any increase that might otherwise be given.

Mr. Boyd-Carpenter: I shall come to that. I am seeking to show that the interest of the employing local authority is an unsound basis. In a certain number of cases it is the interest of the wearer of the uniform that is involved. I suggest that it is really a matter between the employer and the employee. If uniforms are provided, the employee is not affected by the tax. If uniforms are not provided by the employer, that may be a material factor in the arrangements made between employer and employee, and it would be quite wrong to use the machinery of taxation to intervene between the two.
In either case, however admirable may be the right hon. Gentleman's intentions, this is quite the wrong way to provide the relief for which he asks. In addition, it is a proposal which would raise very severe difficulties in connection with the administration of the tax. It would impose a heavy load on the administration, and it would give considerable opportunities for evasion. For those reasons, my right hon. Friend is unable to accept the Amendment.

Mr. H. Wilson: Perhaps I might speak again, by leave of the House, to indicate the considerations which would move me to withdraw the Amendment. The hon. Gentleman has replied to my case with his customary courtesy. At this time of the morning I will not weary the House with a long argument with him on some of his facts, which I would seriously contest. I think I could find an argument which even he would accept to deal with the point about the difference between local authorities and the Fighting Services.
Will he be prepared to consider, without committing himself, evidence which I will put before him to suggest that some facts are rather different from what he has stated, particularly in relation to the fairly heavy load of tax now to be carried by uniforms which were previously tax-free? I am not asking him to indicate that he is likely to change his


view on the point of principle which he put very cogently. I ask whether he will be good enough to examine some evidence I should like to bring before him. If he will, I might ask leave to withdraw the Amendment.

4.45 a.m.

Mr. Boyd-Carpenter: I hope I need not tell the right hon. Gentleman that any evidence, views, or argument that he would like to put either to my right hon. Friend or to myself, we shall be happy to receive.

Mr. Wilson: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Boyd-Carpenter: I beg to move, in page 85, line 19, column 2, to insert:
3 0 0 per pair (1 10 0 per article).
This Amendment and the three which immediately follow it are consequential upon the decision announced earlier by my right hon. Friend to make certain reductions in the tax payable on certain types of footwear. These amendments adjust the D figure to give relief, for the reasons that my right hon. Friend then gave, to articles of footwear which, on reconsideration, we thought perhaps were not being as well treated as they should be.

Amendment agreed to.

Further Amendments made: In page 85, line 20, leave out from beginning, to end of line 26.

In line 36, column 2, leave out "15 0," and insert "1 5 0."

In line 37, column 2, leave out "7 6," and insert "12 6."—[Mr. Boyd-Carpenter.]

Mr. Boyd-Carpenter: I beg to move, in page 86, line 10, to leave out from "length," to the end of line 11, and to insert:




per article.


(a) of fur skin
…
12
0
0


(b) of Class A material
…
6
10
0


This is the first of the Amendments consequential upon the decision announced by my right hon. Friend to give a higher D in the case of various fur articles. This one gives a higher D for fur coats.

Amendment agreed to.

Further Amendments made: In page 86, line 29, at end, insert:






per article.


(a) of fur skin
…
…
…
8
0
0

In line 30, leave out "or of fur skin."

In line 38, leave out from "length," to end of line 40, and insert:




per article.


(a) of fur skin
…
4
10
0


(b) of any other description
…
1
0
0

In page 87, line 34, column 2, insert:
3 0 0 per pair (1 10 0 per article).

In line 35, leave out from beginning, to end of line 41.

In page 88, line 21, at end, insert:



per article.


27. Fur stoles containing not less than 2 sq. ft. of fur skin measured on the leather
4
10
0

—[Mr. Boyd-Carpenter.]

Amendments agreed to.

Mr. Dryden Brook: I beg to move, in page 88, line 36, to leave out "14 6," and to insert "1 0 0."
This is different from the previous Amendment in that it does not deal with a special category, but with a whole industry. This tax applies to the whole of the fine worsted industry and will affect Huddersfield, Halifax and Blackburn in a very particular way. I press this Amendment for three reasons. First, on behalf of the consumer; secondly, on behalf of the export trade; and, thirdly, on behalf of production in the home industry.
I wonder if hon. and right hon. Gentlemen realise that practically the whole of fine worsted clothing comes within the tax range, but that fine woollens can be produced at a price which excludes them from the tax. Therefore this tax, in a sense, penalises men as against women, because women's clothing is on the whole manufactured from fine wool cloths, while men's suits are manufactured from fine worsted. On this occasion we men have a complaint against the Chancellor for having penalised us against the other sex. If the D line is raised to £1 it will mean that many of the fine worsted cloths will escape the tax, and that men will be placed in the same position as they were under the old Utility scheme.
In relation to the export trade, I do not wish to develop the arguments I put forward in the Committee stage, but the


export clothing trade depends to an increasing extent upon the basis of the home trade. If there is not a fairly big production of cloth in the home trade, obviously the price at which a unit can be manufactured will be high compared with the amount of cloth produced. If we are to reduce the cost of production, we must have long runs of any particular cloth.
In this connection, it is interesting to read in the morning's papers, particularly in the "Yorkshire Observer," the figures for the export of cloth to the United States in May. In the past the export of fine worsteds to the United States has been three or four times as great as the export of fine wollens. Now the emphasis is in entirely the opposite direction. In May, 800,000 yards of fine woollens were exported to the United States against 240,000 yards of fine worsteds. More than double the amount of woollens—although the export of fine worsteds to the United States has always been a major part of the export of woollen textiles in the dollar area. I am not suggesting this evidence is conclusive, but I believe that it is something which is weighing against the development of our export trade.
As far as production for the home market is concerned, every other section of the cotton and textile trade has benefited to a considerable extent more than has the fine worsted trade in relation to the Purchase Tax problem. Just because the fine worsteds are the most expensive cloths they come within the tax range.
I plead with the Chancellor to give this matter further consideration. It affects not merely one category of people but a whole industry scattered over the West Riding of Yorkshire. I ask him to accept the Amendment and to raise the D line in order to help an important section of industry in the home market and, more important still, in the export trade.

Mrs. White: I want to support the arguments of my hon. Friend the Member for Halifax (Mr. D. Brooke). I am all in favour of men having equal treatment with women but in this instance, while I would certainly grant him that men use worsted cloths for their suits to a far greater extent than women use them for their clothes, women

do, in fact, wear tailor-made worsted suits; and they find that they wear very well indeed.
I am more concerned with the export trade. This Amendment touches upon the problem, which we shall find in subsequent Amendments, of combining quality goods for export with the type of goods we had under the Utility scheme and which we are now to have under the D scheme. This Amendment has been put on the Order Paper again because we believe that this country has a very great reputation abroad for fine worsted cloth. In almost every country in Europe, and certainly in the United States, we have an excellent reputation for men's suitings.
It would be most unfortunate if we should detract in any way from our prospects in the export market and more particularly, as my hon. Friend the Member for Halifax suggested, in the dollar market, where we have this great reputation. This applies not only to the cloth that we actually export. Our reputation in the United States for goods which are exported there means that when tourists come from the dollar countries to this country they are more inclined to order suits in this country. That, in turn, means that they support not only the worsted industry but high quality craftsmanship in tailoring.
We hope that for all these reasons the Chancellor will feel inclined to accept the Amendment. I am not going into the difficulty which we had in Committee of distinguishing between woollen and worsted. That problem appears to be still unsolved by anybody on either side of the House. But the arguments in favour of keeping our reputation for high-quality cloths for suits are well worth consideration.

Mr. H. Wilson: I should like to support this Amendment which was moved by my hon. Friend the Member for Halifax (Mr. Brook) with very great ability and with great knowledge of the wool trade. The House will have noticed that this Amendment and a corresponding one dealing with cotton goods only appeared very late on the Order Paper. The House will probably approve of our action in putting them down late because in previous debates all of us have stressed the dangers of creating new un-


certainty in the trade. Although we have become accustomed, in relation to this Schedule, to a situation in which very few of our proposals are accepted by the Government, even the moving of an Amendment to a Bill presented by so obdurate a Chancellor of the Exchequer as the present one might be regarded as creating some degree of uncertainty in the trade. We were anxious to avoid any uncertainty and, therefore, this Amendment was put down extremely late.
5.0 a.m.
We ask, and I am sure the Chancellor will agree, that this matter be disposed of this morning one way or the other, so that if the Amendment is accepted, as I hope it will be, it can come into effect with the minimum of uncertainty. If the Chancellor is going to ask his hon. Friends, once again, to vote it down, at least, there will have been no uncertainty caused because the time at which we are meeting is one when very little trade takes place in the textile industry.
I understand that it is unlikely that the Amendment on cotton piece goods will be selected. I certainly do not intend to get out of order by trying to argue about cotton, when we are discussing wool, although it will be obvious to the House, and particularly to those hon. Members who sat through or studied the debates we had during the Committee stage, that many of the arguments applicable to the troubles of the cotton industry, are also applicable to the troubles of the wool industry in Yorkshire and other parts of the country.
My hon. Friend the Member for Halifax stressed three important reasons why it was desirable that this Amendment should be accepted. They are, first, the position of the consumer; second, the position of the export trade; and third, the position of the production industry. I do not want to repeat the arguments deployed during the Committee stage and in previous debates about the consumer. It is a fact that on most of the better graded suitings, and certainly on practically all of the worsted suitings of the range referred to by my hon. Friend, suits, which were tax free before, will now carry a tax. The Chancellor is

familiar with that argument and we are equally familiar with his rather stereotyped reply to it.

Mr. R. A. Butler: As we are all familiar with the arguments and have debated them before, why do we debate them on the Report stage?

Mr. Wilson: We are debating them on the Report stage because the Chancellor must realise the very serious state of affairs in Yorkshire, as well as in Lancashire. It is a fact that we have had more debates and speeches about the position in Lancashire than Yorkshire. I know that the Chancellor is aware that the position in both counties is very serious. But just because he chooses to repeat what we consider to be totally unacceptable arguments, asking his hon. Friends to vote against this perfectly reasonable Amendment is no reason why we should be denied the right to bring this matter forward, especially when the welfare, not only of the two counties, but of the wool industry is at stake.
I want to pursue the argument about the position of the consumer. I want to follow my hon. Friend in his discussion of the export trade, though, I think, the Chancellor and the President of the Board of Trade must be two very worried men when they consider the probable future trend of textile exports. They were not very hopeful about them in their Economic Survey and had written off the textile trade as far as exports were concerned this year. Everything my hon. Friend said was of direct relevance to our balance of payments position and of direct relevance to this Amendment on the Order Paper.
I want to bring to the attention of the country the desperate state of the textile industry, including wool, due to a number of factors, which we have analysed at considerable length in the House and which I do not want to go into again in any detail, and due, as far as short-run difficulties are concerned, to the fact that the pipeline is thoroughly overstocked with production of all kinds. Anyone, who is trying to re-establish production in the textile industry today, whether in Lancashire or Yorkshire, knows how his efforts are inhibited by reason of this blockage of the pipeline.
We appealed to the Chancellor at the beginning of these debates to take Purchase Tax off the textile trade. We were powerfully supported by some strong arguments on the other side of the House. The Chancellor decided, because of this fantasy of maintaining revenue, that he could not do it. I repeat that his failure to take action to remove the blockage in the textile pipeline is having a most serious effect in Lancashire.
We have never said that the depression in the textile industries, whether in Lancashire or Yorkshire, was deliberately brought about by this Government, and indeed my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I went out of our way to reassure the Chancellor when he thought that we had been saying that. On the other hand, this recession has occurred for reasons which I will not go into now, and it is widely felt in Lancashire and Yorkshire that, the recession having occurred, the Government are not doing anything about it and are not taking any steps to remove it.
There is a difference between failing to cause a disaster and failing to deal with it.
Thou shalt not kill; but need'st not strive Officiously to keep alive.
It might be a cruel thing to say of this Government—I am not accusing them of killing the textile industry—but I am accusing them of failing officiously to strive to keep those industries alive.
One of the contributions which the Chancellor could make to clear the pipeline would be to raise the D levels and, therefore, remove the impact of Purchase Tax on these goods. He has refused to do it as a general measure. We appeal to him this morning to do it for this woollen cloth which is the subject of this Amendment. The Chancellor will be aware that if he does that it will not of itself entirely solve the problem. It will create one of the conditions in which the problem can be solved, but there is a grave degree of weak selling going on in Lancashire and Yorkshire today.
Merchants and manufacturers are going all over the country trying to sell these goods at prices a long way below minimum cost of production. That is an unhealthy state of affairs. I know that some hon. Members are taking credit for it in that they claim to have reduced the cost of living with respect to textile goods.

I would only say that they should make those speeches in the textile areas and see what happens.
There are already serious signs that the unemployment in the textile areas will start off a further recession as the purchasing power of the workers in those industries is reduced and they have no money to buy other consumer goods. There are many other things which the Chancellor can do to clear the blockage in the pipeline. It would be out of order for me to go into them now, but I hope that he will recognise the existence of this problem. I hope that since he last spoke on the subject he will recognise that the problem has got a great deal worse. I am sure the Parliamentary Secretary to the Board of Trade can confirm that fact from the evidence coming into his Department, and I hope the Board of Trade are pressing the Treasury to take all the measures that are necessary.
As an immediate measure there is before us this proposal to raise the D level on woollen and worsted cloth—that is, for Class A material—to 20s. I hope that if the Chancellor will agree to do that he will, at the same time, in conjunction with the Board of Trade take all the other measures which are necessary to clear the pipeline and enable production to be resumed.

Mr. R. A. Butler: As the right hon. Gentleman said, this Amendment appeared on the Order Paper this morning, and we have done our best to look into it in the time available. It was moved in a very suitable way by the hon. Member for Halifax (Mr. D. Brook) and supported by the hon. Lady the Member for Flint, East (Mrs. White). I am fully aware of the anxiety which prompts their putting it down and of the districts they represent.
The right hon. Member for Huyton (Mr. H. Wilson) went into the question as it affected Lancashire. I do not think it would be proper for me to follow his long observations on this matter, however serious they are. We are fundamentally, I think, invading Yorkshire in this Amendment. I am trying to deal with the problems of Yorkshire. I will only say——

Mr. Wilson: I was not really basing most of my argument on Lancashire. I was talking about the textile trades. The


problems of Lancashire and Yorkshire at present are the same.

Mr. Butler: In their desire to assist both Lancashire and Yorkshire the Government, as the right hon. Gentleman knows, have not only taken action in regard to Purchase Tax but also have certain amendments to offer in respect of the D, one of which we shall come to in an Amendment in my name which, I hope, we shall reach before long. Further, the Government have also placed certain orders, about which more will be heard at the proper time, to help overcome the unemployment in both Lancashire and Yorkshire. Within the limited powers of the Government we are trying to do our best. We have certainly not done all we should do, and we certainly shall not stop where we are.
This Amendment is exactly similar to one put down and debated in the Committee stage, and in order that hon. Members may see how faithfully we are following the Committee stage on this Report stage—and this is about the sixth example—I refer them to c. 1340, and onwards, for several pages, of the OFFICIAL REPORT for 13th May. I shall not repeat all the arguments here now. I have been very glad to deal with this Amendment myself to try to indicate the anxiety which the Government have on the subject of the industry.
We were discussing this before and we discussed the difference between woollens and worsteds. Expensive worsteds are, of course, above the D line, but we do not agree that 14s. 6d. is too low for the range of worsteds and woollen cloths taken as a whole. If anything, I think, it would be on the generous side. It is, of course, recognised as part of the D scheme that certain of the more expensive Utility goods now bear a small proportion of tax. We need not go back over that ground, but we do not think that the D fixed at 14s. 6d. is unsuitable for woollen and worsted cloths taken as a whole.
This Amendment refers to the worsted cloth, and I think hon. Members will remember that we had a debate in which the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) took a special interest in what is called the two to one ratio—that is, the ratio of the piece goods to the made-up goods.

We have made investigations since I made the statement in the Committee on 13th May—on exactly the same subject as this, and reported in the OFFICIAL REPORT at c. 1381. We have made investigations as to whether my remarks about the working of the two to one ratio were correct, and our investigations so far prove my words to have been just. We shall have to make further exhaustive examination into this matter when the D scheme has had time to settle down, but the position would be very much upset if we were now to fix the D from 14s. 6d. to 20s.
The D levels of woollen garments would have to be adjusted throughout and that would mean further adjustments to the scheme. We have worked it out very carefully. These are important points. It would also react on the general relationship in which we try to preserve certain sorts of cloth—table cloths, curtains, bed sheets, and certain other articles, which are fixed in a certain ratio one to another. If we were to accept the Amendment the cost would be about £2 million, I am informed. It is a very considerable amount. We are at the end now, and there is no further stage at which we could make the adjustments we should be bound to make if we were to accept the Amendment in respect of the woollen garments themselves.
5.15 a.m.
Therefore, I hope that hon. Members who have moved this will realise that we do quite sincerely believe that the D level at 14s. 6d. will not be unfair to woollens and worsteds. We cannot make alterations to what has already been decided, but I give the House the assurance that I will watch the working of the two to one ratio, and the operation of the D scheme as a whole. I will do that, realising the difficulties of towns like Halifax and, indeed, the whole of Yorkshire; and, on that understanding, I hope that hon. Members will not press this matter to a Division, although it would be for reasons which I fully understand.

Mr. Anthony Greenwood: We have heard so many conciliatory but unsatisfactory replies at this stage of the Finance Bill to the pleas which we have put forward that I cannot pretend that


I am surprised the Chancellor has not been able to do more to meet the hopes of my hon. Friends this morning. But I am surprised that, so far as I can see, not one hon. Member from the woollen textile constituencies is on the other side of the House. Indeed, if, throughout our debates on the textile situation, we had had more representation from those areas we might have got more from the Chancellor.
However, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) has said, although the situation in Yorkshire has attracted less attention than that in Lancashire, it is none the less serious; and what we have tried to do throughout is to remove as much woollen cloth as possible from the range of taxation and particularly to raise the D level in the case of worsteds. It was because of difficulties in differentiating that we proposed to raise the D level for all woollen cloth, including worsted; that would have had the effect of a difference of about 3s. a yard which is a not inconsiderable alteration.
My right hon. Friend the Member for Huyton spoke, too, about the President of the Board of Trade appearing to be a worried man. It has occurred to me that he is so worried, he is unable to sleep, because he has just made an appearance. I recall that we had to complain on another late Sitting of the House about the absence of the right hon. Gentleman, but we are glad to see his somewhat late arrival.
I would like to say, now that he is with us, that he is doubtlessly worried if he has seen the April summary of the Wool Industry Bureau of Statistics, published in the "Manchester Guardian" on 6th June. My hon. Friend the Member for Halifax (Mr. D. Brook) spoke about exports of fine worsteds to the United States, and if the President will refer to the statistics, he will see that consumption in April was 22 per cent. less than a year previous, and that the rate of delivery of worsted yarns was 32 per cent. less than a year ago, and woven wool fabrics were delivered at a rate 26 per cent. lower than in April last year.
Further, he should read the report issued by the firm, Gray's Carpets and Textiles, Ltd., which produces a wide

range of textile goods. Some of the things which this firm has to say relates very closely to this situation, and it points out that, in the first three months of this year it incurred a loss of £139,895, as against a profit of £269,968 for the corresponding period of 1951. It is clearly impossible for firms to go on in conditions of that kind.
The Chancellor has told us something of what the Government has done. He has referred to the reduction in the rate of taxation. I cannot believe that the Government could not have done more than they have done to help this situation. For months now the industry has been waiting for some practical help from the right hon. Gentleman. A few minutes ago he said, "We shall not stop where we are." I hope that he was referring to the Government's position on the benches opposite, which I do not think will continue indefinitely. I was hoping that the right hon. Gentleman would follow up that statement by telling us what the Government are going to do to help the woollen textile industry.
We are still hoping for some indication from the benches opposite that the Government have a policy to help either the woollen or the cotton industry. Throughout the discussion on this problem I am afraid that the Chancellor has looked at it entirely from the point of view of revenue, which he is not going to get, anyway, on the scale he hopes. He has not looked at it from the point of view of the long-term interest of the industry. One of the most surprising features of this discussion was the light-hearted and complacent way in which the Chancellor rose in his place and asked why we were discussing this problem on the Report stage.

Mr. R. A. Butler: I had no intention of being light-hearted or complacent and I had no reason to be; but the right hon. Member for Huyton (Mr. H. Wilson) was referring to his arguments which, he said, had been heard before. That is what made me intervene. It was not because I have any doubts about the difficulties of Lancashire or Yorkshire.

Mr. Greenwood: The right hon. Gentleman may have no doubts about the difficulties of Lancashire or Yorkshire, but he clearly has very great diffi-


culties in formulating a policy to cope with them. Certainly, the speech we heard from him a few minutes ago did not do anything to destroy the impression of complacency which his earlier attitude had encouraged.

Mr. Butler: On a point of order. Would it be in order, Mr. Deputy Speaker, when we are discussing an Amendment to increase the D level for wool cloth, to give a full description of the Government's attitude and policy to Yorkshire and Lancashire?

Mr. Deputy-Speaker (Sir Charles MacAndrew): This Amendment is quite narrow. It is to leave out "14s. 6d." and insert "£1."

Mr. Greenwood: The right hon. Gentleman was prepared to range rather widely in order to discuss the problems of Lancashire on this Amendment. I should not have thought that he would have felt inhibited from addressing his remarks more particularly to the problem covered by the Amendment.
In view of the attitude he has adopted—and the right hon. Gentleman has twice tried to stop me from saying this—we propose to divide the House upon this question.

Question put, "That '14 6' stand part of the Bill."

The House divided: Ayes, 202; Noes, 188.

Division No. 179.]
AYES
[5.22 a.m.


Allan, R. A. (Paddington, S.)
Duncan, Capt. J. A. L
Lucas-Tooth, Sir Hugh


Alport, C. J. M.
Eccles, Rt. Hon. D. M.
McAdden, S. J.


Amery, Julian (Preston, N.)
Eden, Rt Hon. A
Macdonald, Sir Peter (I. of Wight)


Anstruther-Gray, Major W. J
Fell, A.
Mackeson, Brig. H. R.


Ashton, H. (Chelmsford)
Fisher, Nigel
McKibbin, A. J.


Asshaton, Rt. Hon R. (Blackburn, W.)
Fleetwood-Hesketh, R. F.
McKie, J. H. (Galloway)


Astor, Hon. J. J. (Plymouth, Sutton)
Fletcher-Cooke, C.
Macmillan, Rt. Hon. Harold (Bromley)


Baldwin, A. E.
Foster, John
Macpherson, Maj. Niall (Dumfries)


Banks, Col. C.
Gage, C. H.
Maitland, Patrick (Lanark)


Barber, A. P. L.
Galbraith, T. G. D. (Hillhead)
Manningham-Buller, Sir Reginald


Barlow, Sir John
Garner-Evans, E. H.
Markham, Major S. F.


Baxter, A. B.
Godber, J. B.
Marples, A. E.


Beach, Maj. Hicks
Gomme-Duncan, Col. A
Marshall, Douglas (Bodmin)


Beamish, Maj. Tufton
Gough, C. F. H.
Marshall, Sir Sidney (Sutton)


Bell, Philip (Bolton, E)
Graham, Sir Fergus
Maudling, R.


Bell, Ronald (Bucks, S.)
Grimond, J.
Maydon, Lt.-Comdr S. L C


Bennett, F. M. (Reading, N.)
Harris, Frederic (Croydon, N.)
Medlicott, Brig. F.


Birch, Nigel
Harris, Reader (Heston)
Mellor, Sir John


Bishop, F. P.
Harrison, Col. J. H. (Eye)
Morrison, John (Salisbury)


Black, C. W.
Harvey, Ian (Harrow, E.)
Mott-Radclyffe, C. E.


Boothby, R J G
Hay, John
Nabarro, G. D. N.


Bossom, A. C.
Heald, Sir Lionel
Nicholls, Harmar


Boyd-Carpenter, J. A.
Heath, Edward
Nicolson, Nigel (Bournemouth, E.)


Boyle, Sir Edward
Higgs, J. M. C
Nield, Basil (Chester)


Braine, B. R.
Hill, Dr. Charles (Luton)
Noble, Cmdr. A. H. P.


Bromley-Davenport, Lt.-Col. W H
Hinchingbrooke, Viscount
Odey, G. W.


Brooke, Henry (Hampstead)
Holland-Martin, C. J.
Ormsby-Gore, Hon. W. D


Brooman-White, R. C.
Hollis, M. C.
Orr, Capt. L. P. S


Browne, Jack (Govan)
Holt, A. F.
Osborne, C.


Buchan-Hepburn, Rt. Hon P G T
Hope, Lord John
Partridge, E.


Bullard, D G.
Hopkinson, Henry
Peto, Brig. C. H. M


Burden, F. F. A.
Hornsby-Smith, Miss M P.
Peyton, J. W. W


Butcher, H. W.
Horobin, I. M.
Pickthorn, K. W. M.


Butler, Rt. Hon. R. A. (Saffron Walden)
Horsbrugh, Rt. Hon. Florence
Pilkington, Capt. R. A


Carr, Robert (Mitcham)
Howard, Greville (St. Ives)
Pitman, I. J.


Carson, Hon. E.
Hudson, Sir Austin (Lewisham, N.)
Powell, J. Enoch


Cary, Sir Robert
Hutchinson, Sir Geoffrey (Ilford, N.)
Price, Henry (Lewisham, W.)


Channon, H.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Profumo, J. D.


Clarke, Col. Ralph (East Grinstead)
Hyde, Lt.-Col. H. M.
Raikes, H. V.


Cole, Norman
Johnson, Eric (Blackley)
Rayner, Brig. R


Conant, Maj. R. J. E.
Jones, A. (Hall Green)
Redmayne, E.


Cooper, Sqn. Ldr Albert
Kaberry, D.
Remnant, Hon. P


Cooper-Key, E. M.
Kerr, H. W. (Cambridge)
Roberts, Peter (Heeley)


Cranborne, Viscount
Lambert, Hon. G.
Rodgers, John (Sevenoaks)


Crookshank, Capt. Rt. Hon. H F C
Lambton, Viscount
Roper, Sir Harold


Crosthwaite-Eyre, Col. O. E
Lancaster, Col. C. G.
Ropner, Col. Sir Leonard


Crouch, R. F.
Legge-Bourke, Maj. E. A. H
Russell, R. S.


Crowder, Petre (Ruislip—Northwood)
Legh, P. R. (Petersfield)
Ryder, Capt. R. E. D.


Darling, Sir William (Edinburgh, S.)
Lindsay, Martin
Salter, Rt. Hon. Sir Arthur


Deedes, W. F.
Linstead, H. N.
Schofield, Lt.-Col. W. (Rochdale)


Digby, S. Wingfield
Lloyd, Maj. Guy (Renfrew, E.)
Shepherd, William


Donaldson, Cmdr. C. E. McA.
Lockwood, Lt.-Col. J. C.
Simon, J. E. S. (Middlesbrough, W.)


Doughty, C. J. A.
Longden, Gilbert (Herts, S.W.)
Smiles, Lt.-Col. Sir Walter


Drayson, G. B.
Lucas, Sir Jocelyn (Portsmouth, S.)
Smithers, Peter (Winchester)


Drewe, G.
Lucas, P. B. (Brentford)
Soames, Capt C.




Speir, R. M.
Thompson, Lt.-Cdr. R. (Croydon, W.)
Ward, Miss I. (Tynemouth)


Spence, H. R. (Aberdeenshire, W.)
Thorneycroft, Rt. Hn. Peter (Monmouth)
Waterhouse, Capt. Rt. Hon. C.


Stanley, Capt. Hon. Richard
Thornton-Kemsley, Col. C N
Webbe, Sir H. (London &amp; Westminster)


Stevens, G. P.
Tilney, John
Wellwood, W.


Storey, S.
Touche, Sir Gordon
White, Baker (Canterbury)


Strauss, Henry (Norwich, S.)
Tweedsmuir, Lady
Williams, Gerald (Tonbridge)


Summers, G. S
Vane, W. M. F.
Williams, Sir Herbert (Croydon, E.)


Sutcliffe, H.
Vaughan-Morgan, J. K
Williams, R Dudley (Exeter)


Taylor, Charles (Eastbourne)
Vosper, D. F.
Wills, G.


Taylor, William (Bradford, N.)
Wakefield, Edward (Derbyshire, W.)
Wilson, Geoffrey (Truro)


Thomas, Rt. Hon. J. P. L. (Hereford)
Wakefield, Sir Wavell (Marylebone)
Wood, Hon. R.


Thomas, P. J. M. (Conway)
Walker-Smith, D. C.



Thompson, Kenneth (Walton)
Ward, Hon. George (Worcester)
TELLERS FOR THE AYES:




Mr. Studholme and Mr. Oakshott.




NOES


Acland, Sir Richard
Gaitskell, Rt. Hon H. T. N
Paling, Will T. (Dewsbury)


Adams, Richard
Gibson, C. W.
Panned, Charles


Albu, A. H.
Glanville, James
Pargiter, G. A


Allen, Scholefield (Crewe)
Gordon Walker, Rt. Hon. P. C.
Paton, J.


Attlee, Rt. Hon. C. R.
Greenwood, Anthony (Rossendale)
Pearson, A


Awbery, S. S.
Grey, C. F.
Peart, T. F.


Bacon, Miss Alice
Griffiths, David (Rother Valley)
Plummer, Sir Leslie


Baird, J.
Griffiths, William (Exchange)
Price, Joseph T. (Westhoughton)


Barnes, Rt. Hon. A. J
Hale, Leslie (Oldham, W.)
Price, Philips (Gloucestershire, W.)


Bence, C. R.
Hall, John (Gateshead, W.)
Proctor, W. T.


Benn, Wedgwood
Hamilton, W. W.
Rankin, John


Benson, G.
Hannan, W.
Reid, Thomas (Swindon)


Beswick, F.
Hargreaves, A.
Rhodes, H.


Bing, G. H. C
Hayman, F. H.
Robens, Rt. Hon. A.


Blackburn, F.
Healey, Denis (Leeds, S.E.)
Roberts, Albert (Normanton)


Blenkinsop, A.
Henderson, Rt. Hon. A. (Rowley Regis)
Roberts, Goronwy (Caernarvonshire)


Blyton, W. R.
Herbison, Miss M.
Robinson, Kenneth (St. Pancras, N.)


Boardman, H.
Hobson, C. R.
Rogers, George (Kensington, N.)


Bottomley, Rt. Hon. A. G.
Houghton, Douglas
Ross, William


Braddock, Mrs. Elizabeth
Hoy, J. H.
Royle, C.


Brockway, A. F.
Hudson, James (Ealing, N)
Schofield, S. (Barnsley)


Brook, Dryden (Halifax)
Hughes, Cledwyn (Anglesey)
Shinwell, Rt. Hon E.


Broughton, Dr. A. D. D
Hughes, Emrys (S. Ayrshire)
Short, E. W.


Brown, Rt. Hon. George (Belper)
Hughes, Hector (Aberdeen, N.)
Shurmer, P. L. E


Burton, Miss F. E.
Hynd, H. (Accrington)
Silverman, Julius (Erdington)


Butler, Herbert (Hackney, S.)
Hynd, J. B. (Attercliffe)
Simmons, C. J (Brierley Hill)


Callaghan, L. J.
Irving, W. J. (Wood Green)
Slater, J.


Castle, Mrs. B. A
Jay, Rt. Hon. D. P. T.
Snow, J. W.


Chapman, W. D.
Jenkins, R, H. (Stetchford)
Sorensen, R. W.


Chetwynd, G. R.
Johnson, James (Rugby)
Soskice, Rt. Hon Sir Frank


Clunie, J.
Johnston, Douglas (Paisley)
Sparks, J. A.


Collick, P. H.
Jones, David (Hartlepool)
Stewart, Michael (Fulham, E.)


Corbet, Mrs. Freda
Jones, Frederick Elwyn (West Ham, S.)
Swingler, S. T.


Craddock, George (Bradford, S)
Jones, Jack (Rotherham)
Taylor, John (West Lothian)


Crossman, R. H. S.
Jones, T. W. (Merioneth)
Taylor, Rt. Hon. Robert (Morpeth)


Dailies, P.
Keenan, W.
Thomas, David (Aberdare)


Dalton, Rt. Hon, H.
King, Dr. H. M.
Thomas, George (Cardiff)


Darling, George (Hillsborough)
Lee, Frederick (Newton)
Thomas, Iorwerth (Rhondda, W)


Davies, A. Edward (Stoke, N.)
Lever, Leslie (Ardwick)
Ungoed-Thomas, Sir Lynn


Davies, Ernest (Enfield, E.)
Lewis, Arthur
Wallace, H. W.


Davies, Harold (Leek)
Lindgren, G. S.
Watkins, T. E.


Davies, Stephen (Merthyr)
MacColl, J. E.
Weitzman, D.


de Freitas, Geoffrey
McGovern, J.
Wells, Percy (Faversham)


Deer, G.
McInnes, J.
Wells, William (Walsall)


Delargy, H. J.
McKay, John (Wallsend)
West, D. G.


Dodds, N. N.
McLeavy, F.
Wheatley, Rt. Hon. John


Donnelly, D. L.
MacPherson, Malcolm (Stirling)
White, Mrs. Eirene (E. Flint)


Dugdale, Rt. Hon. John (W. Bromwich)
Mallalieu, J. P. W. (Huddersfield, E.)
Whiteley, Rt. Hon. W


Ede, Rt. Hon. J. C.
Mann, Mrs. Jean
Wigg, George


Edwards, John (Brighouse)
Manuel, A. C.
Wilkins, W. A.


Evans, Albert (Islington, S.W.)
Marquand, Rt. Hon. H. A.
Willey, Frederick (Sunderland, N.)


Evans, Edward (Lowestoft)
Mayhew, C. P.
Willey, Octavius (Cleveland)


Evans, Stanley (Wednesbury)
Mitchison, G. R
Williams, Rev. Llywalyn (Aberlillery)


Ewart, R.
Moody, A.S
Williams, Ronald (Wigan)


Fernyhough, E.
Money, R.
Williams, W. R. (Droylsden)


Field, W. J.
Mort, D. L.
Williams, W. T. (Hammersmith, S.)


Finch, H. J.
Moyle, A.
Wilson, Rt. Hon. Harold (Huyton)


Fletcher, Eric (Islington, E.)
Mulley, F. W.
Winterbottom, Ian (Nottingham, C.)


Foot, M. M.
Murray, J. D.
Wyatt, W. L.


Forman, J. C.
Nally, W.
Yates, V. F.


Fraser, Thomas (Hamilton)
Noel-Baker, Rt. Hon. P J.
Younger, Rt. Hon K


Freeman, John (Watford)
Orbach, M.



Freeman, Peter (Newport)
Oswald, T.
TELLERS FOR THE NOES:



Padley, W E
Mr. Bowden and Mr. Popplewell.

5.30 a.m.

Mr. R. A. Butler: I beg to move, in page 88, line 37, to leave out "(b) Class B material," and to insert:



per sq.
yd.


(b) Class C material
6
0


(c) Class B material of a weight per square yard, exclusive of non permanent loading, of not less than 6 ozs. other than Class C material
6
0


(d)Class B material not of such a weight as aforesaid, other than Class C material.




It would be convenient also to deal with the other Government Amendments to page 88, in lines 44 and 48.
These Amendments implement the decision, first, to increase the D figures for furnishing and other fabrics and non-wool material weighing 6 oz. or more per square yard from 4s. to 6s. per square yard from 3rd June and, second, to increase the D for linen cloth bedspreads, curtains, and so forth, from 4s. to 6s. per square yard from 18th June.
To deal first with the furnishing fabrics, the Amendment I have moved is the result of requests from right hon. and hon. Members on all sides during the Committee stage. I issued an invitation to my right hon. Friend the Member for Blackburn, West (Mr. Assheton), the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) and the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), with the aid of others, to help me find some weightage and D to deal with the furnishing fabric problem.
The furnishing fabric problem is one which affects Blackburn among other places and also production a good deal and generally in Lancashire. The difficulty is to find a combination of a weight and a D which does not admit dress fabrics and cotton sheeting, for example. The difficulty, which is rather intense, is that in some cases dress fabrics and furnishing fabrics are of very much the same material. It has even been known that ladies have torn the furnishing fabrics off the curtain rails or furniture and placed them on their backs and been quite well dressed.
It was, therefore, important to find a D level which was sufficiently heavy to be slightly annoying as a dress but, at the same time, would meet the problem of furnishing fabric which is very important for our own production and, to some

extent, for export. While I do not presume in the least to say that this arrangement is entirely satisfactory to the right hon. and hon. Gentlemen I have referred to—they might have liked more—they did very kindly co-operate in saying that this would work. I believe that it will work and will be substantially fair. It will bring in, for example, some 75 per cent. by volume, and much more by value, of all non-wool furnishing fabrics. To that extent it is a valuable concession to an important industry in Lancashire.
In the case of loading—which it is necessary to refer to—the qualifying weight is taken as exclusive of non-permanent load, otherwise there would be an incentive to load all cloth just under the dividing line with starch or other material in order to make it qualify for the higher D. We might thus be thought to be encouraging debasement of the quality and fraudulent deception of the public. That is the first and major concession referred to in these Amendments, in framing which I had the benefit of the aid of certain hon. and right hon. Gentlemen on both sides of the House. I am very grateful to them for their help and to those in the trade who advised us.
Then we come to the second concession, which relates to Northern Ireland. Unemployment in Northern Ireland is as severe as or more severe than almost anywhere in the United Kingdom, and quite apart from that there was a certain anomaly between the concession already given in Ds to Northern Ireland for the products of linen, leaving aside linen piece goods.
We therefore decided, after mature consideration, to give this special D for linen cloth in the piece. It is true that a great deal of the products of Northern Ireland are sold as products of linen and not in linen piece goods, and to that extent this concession will not affect the prosperity of Northern Ireland, in my view, as much as the original concession on linen products. But it does logically complete Part II of the Fourth Schedule, and it has the advantage that linen sheeting in the piece, which is used mainly by hospitals and other large institutions, now receives the same rate of D as finished linen sheets.
It is, therefore, a sensible concession and I hope that it will meet the needs


and wishes of the Northern Ireland Members who have shown great activity in this matter and great interest in the difficulties of Northern Ireland at the present time.

Mr. H. Wilson: I want only briefly to comment on what the Chancellor has said. He mentioned that the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton), the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and I formed this somewhat unusual committee for the purpose of trying to help the Chancellor to get what we all thought it was possible to get—a definition of furnishing fabrics for the purpose. I think it is a very unusual procedure.
I do not know whether there have been many instances of this kind in the history of Finance Bills, and I must make it clear that we cannot always undertake, on this side of the House, to join with right hon. Gentlemen opposite in getting the Chancellor out of the mess in which he has landed himself. It is quite fair to say that because the existence of this scheme with the D levels has, as the "Manchester Guardian" and many other trading authorities have said, landed Lancashire in a very serious mess. This could have been avoided if a more intelligent scheme had been adopted in the first instance, or if the Chancellor had accepted our proposals at an earlier stage of the Bill for a higher D level for cotton piece goods in general. However, he did make this unusual proposal, and we were very keen to join in this examination.
I think one thing ought to be said, because there may be some misunderstanding about it, especially in Lancashire. It is that we did not set out, in the first instance, to get a definition based on weight. The Chancellor may have given the House that impression. We tried to do it on a basis of specification and, with the help of the Furnishing Fabric Federation and others concerned, we did work out that kind of proposal. I think the hon. Member for Blackburn, West and certainly the hon. Lady for Blackburn, West (Mrs. Castle) would agree that from every point of view that would have been better had it been really workable.
But officials of the Customs and Excise, who were most helpful throughout this work, satisfied us that the difficulties

were too great in administering it, especially in dealing with some of the international aspects of the problem. Therefore, with very great regret we had to drop the idea of specifications whether based on the old Utility scheme or in another form, and come to this system of weight.
As the Chancellor fairly remarked, we would have liked something more—and so would Lancashire. But we must express our thanks to the Chancellor that he has moved as far as he has in accepting our proposals. I think we all take the view—and Lancashire takes the view—that half a loaf is better than no bread. This will give some advantage to Lancashire, although not as much as we had hoped. The fact that the Amendment is on the Order Paper is a step forward in what we all hoped to achieve when we debated this in the Committee stage.

Mr. Ralph Assheton: I should like to add a word to what the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has said on this question of furnishing fabrics and express my gratitude and that of many hon. Members on both sides of the House who represent Lancashire constituencies for the consideration which my right hon. Friend has given to this matter. We pointed out earlier the great difficulty in which the furnishing fabric industry had been placed, and the Chancellor has gone a very long way to meet their case.
Naturally, we have not got all we wanted. If I might give the House a few illustrations to show the very considerable improvement that has been made, I think they might be of interest. On a good quality mercerised cotton damask the Purchase Tax was previously 12s. a yard; now it is only 5s. On Utility cotton and rayon printed brocade the Purchase Tax, which was 3s. 4d., is now 1s. 2½d. per yard. To give an even more striking case, a wool tapestry which sold in the shops three months ago at 49s. 6d. a yard, including 16s. Purchase Tax, will only cost 35s. 3d., because the Purchase Tax is now only 1s. 9d. on this fabric. That illustrates the very substantial concessions which the Chancellor has made, and once again, on behalf of Lancashire in general, I should like to give him my best thanks.

5.45 a.m.

Mr. Anthony Greenwood: The right hon. Gentleman has been a little selective in the argument he has advanced. Would he not also agree that there are, for example, rayon damasks selling at EI tax free before the Budget which would have gone up to 30s. 6d. under the original D scheme and which are now reduced to 27s., but that people are still paying 7s. a yard more for these fabrics than they did before the Budget?

Mr. Assheton: That may be quite true. I should like to see a further reduction. But many furnishing fabrics are now quite free of tax, or only bear a trivial 1d. or 2d. a yard tax.

Mrs. White: At this hour of the morning I dislike striking a discordant note. [An HON. MEMBER: "Strike it hard."] While many of us are extremely grateful to my right hon. Friend the Member for Huyton (Mr. H. Wilson) and the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) for the hard work that they have put in on this problem of furnishing fabrics, and one would accept unhesitatingly the definition of furnishing fabrics as the most workable that can be found, I should be very sorry if we left this part of the Schedule with the House under the impression that all of us on this side are satisfied with the D level imposed by the Chancellor.
The Chancellor will recall that in the previous debates that we had on this subject we asked, first of all, and so did hon. Members opposite, that Purchase Tax should be remitted entirely in the present state of the industry. The real trouble is that the Chancellor is bound by the general structure of his own Budget. Having now budgeted without taking the state of the textile industry into account, he has made other dispositions of his Revenue so that what he can do in this particular is, of course, limited by wider financial considerations.
The main burden of our dispute with the Chancellor on this point is not over the minor matter of defining furnishing fabrics, but on the major question of his taxation policy with reference to this industry. Therefore, I repeat that it would be completely misleading for him or anyone else to leave this debate with the impression that those of us who represent constituencies in the textile pro-

ducing areas are by any means satisfied with the D level which he has chosen.
I have refreshed my memory of the Chancellor's speech in the Committee stage in which he referred to the rate of tax which, as he well knows, stands at 50 per cent. on piece goods. The right hon. Gentleman has mentioned the argument put forward by my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) concerning the conversion rate, and so forth; but apart from that, piece goods are the most important part of our textile exports and there is still a very high rate of tax on many fabrics which are important in our export trade.
The right hon. Gentleman the Member for Blackburn, West was certainly highly selective in the examples he chose. I am still under the impression that we have a good many fabrics which will still bear a high rate of tax. If one goes beyond the weight of 6 oz. per square yard, chenilles, velvets, and so on, are, of course, expensive fabrics. Therefore, this difference in the D level of 2s. per square yard will make very little difference to export fabrics of that kind.
Furnishing fabrics are above the 6 oz. weight level. I grant that that is the only possible definition for furnishing fabrics but, nevertheless, we still think that the D level is too low. It is lower than that originally proposed on this side of the House for rayon and cotton textiles. I am thinking of high quality furnishing fabrics, chintzes, and so on, and I have particularly in mind the good marketing prospects which, immediately prior to the war, we had in the United States for fabrics which were not heavy but which had a certain distinction in design.
One of the difficulties of this way of defining furnishing fabrics is that it makes no provision for the exclusive designs, and what I might call the sophisticated designs, in which some of our leading manufacturers were making a great impression in the United States of America. One of the best known firms in the trade told me that owing to the high tax level at home, it is now impossible for them to attempt to export this kind of dollar-earning product which, as I say, was one of our most promising lines before the war. None of this seems to have been taken into account in fixing what is still, in our view, far too low a D level.
I want to say a word about linen. The Chancellor suggested that by adding a category for linen piece goods, he was making a concession. Surely, what he is doing is tidying up an anomaly in his original Schedule. As the Schedule said, and I think I have the support of hon. Members from Northern Ireland, there was no possible logical reason why the C fabric should be left out. To refer to it now as a concession seems to be entirely misleading. We have not put down the rather higher D level we had suggested as being more appropriate for linen.
I understand that, as no Amendment has been put down, the hon. Members for Northern Ireland constituencies accept the 6s. We thought that that, also, was on the low side, but we have not concerned ourselves this time to put down an Amendment because, and I should like to reaffirm what my right hon. Friend the Member for Huyton said during the Committee stage, that we have found the trade's representatives unhelpful as far as consultations with this particular part of the textile industry is concerned.
I myself was deputed, on behalf of some of my hon. Friends who are interested in this matter, to make appropriate inquiries in order to avoid annoyance to business people. I had no response and, since our last debate on this subject, I have been informed that one of the gentlemen concerned in the trade mentioned me by name at a trade meeting and said that he had been careful not to give me any information as I was a Socialist.
Apart from the personal discourtesy, which I consider was entirely unmerited, we, on this side of the House, as far as the details of these Schedules had been concerned, had done our utmost to be helpful and non-partisan. I do not pretend that that obtained towards the main malformation of the right hon. Gentleman's Budget, but, in this respect, we have done our utmost to be fair and helpful. But, from the linen trade representatives of Northern Ireland, we have had no credit, no help, and no information. That is not the most tactful way to treat people who may, ultimately, be the Government of this country.
I will leave this point by repeating that, while we are thankful for small mercies, we shall not pretend we are en-

tirely satisfied, taking into account the present state of the textile industry.

Lieut.-Colonel Sir Walter Smiles: The hon. Lady the Member for Flint, East (Mrs. White), mentioned the linen industry. I spent most of the Whit-week holiday on the problems of this industry, doing my best to help, with the other hon. Gentlemen who represent Northern Ireland constituencies. If I had known that the hon. Lady would have joined us in a deputation, it would have given me the greatest possible pleasure to have seen her with us at any time.
The hon. Lady has put her finger on a most vital point. There is no doubt that linen was accepted in the old Utility scheme as being a more expensive fabric to manufacture than cotton, and we got a 50 per cent. preference. The amount of labour required to make a square yard of linen exceeds that required to make a square yard of cotton. This preference has almost gone, and when, in the middle of the last Recess, the concession was given to Lancashire the linen merchants in Northern Ireland were very angry indeed.
However, I must be very careful not to conclude without thanking wholeheartedly the Chancellor and the Financial Secretary for the help they gave us and the interviews which we had on several occasions. I get so carried away with this subject that I am liable to forget to pay these proper compliments. We in Northern Ireland are all grateful to the Chancellor. On bed sheets, table cloths and table covers Northern Ireland merchants are very anxious to get a preference of some 50 per cent. over cotton. We intend to pursue that matter.
As the Chancellor has mentioned, the unemployment situation in Northern Ireland is really worse than in any other part of the United Kingdom, and linen, of course, is our principal trade and has been for years. This D level only indirectly affects us, since 80 per cent. of our production goes for export, but it affects us in that we have no home market, as I and a third of the Ulster Members who spoke on the last occasion have said again and again.
I hope to bring some figures to the attention of the Chancellor of the Exchequer in the future to show him what the real position is. I conclude by


thanking him and the Financial Secretary for the help they have given.

Mrs. Barbara Castle: I make no apology for speaking at this hour on this subject because this is the last opportunity we shall have for the present of referring to Lancashire's need before the door closes finally this year on any possibility of financial help from the Chancellor for a situation which is worsening throughout Lancashire and shows no prospect of improving.
I have been astonished by the contribution of the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton). He is probably the most easily satisfied man in the House of Commons. Here he was only, a few weeks ago, at the beginning of our debates on the Finance Bill, breathing fire, slaughter and rebellion. He was going to the stake for the abolition of Purchase Tax. He was going to put up a tremendous fight for Lancashire. Yet every time we have had a debate on this Bill affecting the cotton industry, the right hon. Member has said how satisfied he is with the Chancellor's non-existent or completely inadequate concessions.
Let us look at what we are pressing on the Chancellor. It is true that the committee that was set up to advise him on this matter agreed among themselves with regard to the definition of furnishing fabrics, but certainly they have no responsibility for the D level which the Chancellor has chosen to fix. It would be quite wrong if we gave the impression that there was a nice all-party agreement to this. Certainly, so far as we on this side of the House are concerned, we consider the D level mistaken.
The Chancellor having been given a workable definition for special treatment of furnishing fabrics has chosen not to use that definition as a basis for introducing a reasonable D line. We are being offered today something entirely different from what we on this side asked for—and what the right hon. Member for Blackburn, West asked for. When we first raised this question we asked for linens a D level of at least 9s. and for class B materials 7s. 6d. At that stage, the right hon. Member for Blackburn, West was quite unsatisfied with our suggestion. He outbid us gallantly with an

Amendment to make the D level for class B material 7s. 9d.

6.0 a.m.

Mr. Assheton: I put down my Amendment long before the hon. Lady put down hers.

Mrs. Castle: All the more reason, I should have thought, for the right hon. Gentleman not being in such a hurry to abandon it.
What are we being offered today? The Chancellor has given us, for linens, a mere 6s. After all this deliberation about furnishing fabrics, and the advice given him by his three experts on the workable definition, he is to give us 6s. merely for the class B fabrics of 6 oz. weight and over, and for class B fabrics not in that definition it remains at 4s. Perhaps I misunderstood the right hon. Gentleman's remarks. I thought he said that this concession would cover 75 per cent. of the furnishing fabrics. Would that mean, therefore, that 75 per cent. of the furnishing fabrics will now be tax free?
If so, that does not correspond with the statement made by the Retail Distributors' Association, which has gone into this problem in great detail and has written to the Chancellor. It wrote on 18th April to put forward certain suggestions whereby furnishing fabrics might be treated in a separate definition. Its proposal was that cloths of 7 oz. weight should have a D figure of 7s. a yard with an extra 1s. a square yard in the case of those heavier fabrics which were printed or woven figured, giving an 8s. D level for the most expensive, better class fabrics. When it put forward this proposal it wrote:
We believe it will be found on examination that the proposed D figure of 7s. per square yard together with the further modification suggested in proposition 2 is not greater than can be amply justified by the median concept if applied to furnishing fabrics alone.
The Chancellor seemed to imply that he had been more generous. Here is a conflict of evidence which will only show that the Chancellor has been a little over-optimistic in the assessment of the effects of his own proposals. Indeed, I am sure the Chancellor would be the first to agree that what he is offering today is something much less than that for which the Furnishing Fabrics Federation itself originally asked.
It is true that, like so many hon. Members, the Federation has been so consistently disheartened by the stonewalling of the Chancellor in the face of its appeals that it has been beaten to its knees, along with the right hon. Gentleman the Member for Blackburn, West, and is now grateful for this small concession, but originally it asked that class C fabrics should be put at the same level as class A, which was even more generous than our suggestion. Here we have a concession by the Chancellor which is much less generous and a D level of a mere 6s.
The Chancellor has shown once again what can only be called cold-blooded complacency in the face of Lancashire's difficulties. He led the House to believe that if only some arrangements could be worked out for a workable definition for selected furnishing fabrics, he would meet their needs. Yet, having been given his workable definition, he comes along with this 6s. a yard and asks us to be grateful for the crumbs from his table.
Unemployment in Lancashire is relentlessly mounting; in the North-West region, on 12th May, there were over 150,000 persons registered as unemployed, and the average figure of unemployment in that region was over 5 per cent. compared with just over 2 per cent. for the country as a whole. But in my constituency, the figure was 6 per cent. and that is just not good enough in this modern age, when we can plan our resources and our finances. The manufacturers of furnishing fabrics in my constituency will be profoundly dissatisfied with the right hon. Gentleman's proposals.
I understand from official figures that the unemployment in Great Harwood is now over 18 per cent. yet the Government come along with a proposal to put on a tax on curtain cloth which, under the old Utility scheme was tax free at 16s. a square yard, wholesale. It will now carry a tax of 5s. a yard. Can it be said, by any stretch of the imagination, that such a thing is economic or financial sanity in the face of unemployment figures which I have quoted? To take a tax-free article such as this curtain cloth, at a time when there is a crying need to stimulate demand, and tax it heavily, is downright insanity.
I only wish that the Chancellor could have read a letter which I received from

one of my constituents this morning; a man who, after a lifetime in the textile industry, and who has been enjoying a wage of £9 a week under the Labour Government, is now trying to live on unemployment benefit under a Conservative Government. That man asks us to fight the battle for his livelihood, and that of thousands like him, and I say to the Chancellor that he has betrayed his trust.

Mr. Rhodes: Although the Chancellor has made a concession, we are not satisfied, and shall not be until we have cleared out this Purchase Tax on all textiles. Within the next few months I think that the Chancellor will probably come to see the foolishness of putting on this tax on goods produced by an industry in the middle of a slump. Another ridiculous thing which has struck me since we started discussing Purchase Tax is that it is impossible to run a D scheme of this type unless there is a staple raw material.
We have argued today about the amounts by which we should raise the D level, but many of the proposals are quite meaningless; because, since the last debate in this House on the subject, the price of wool has gone up by 29d. a lb. On the other hand, cotton is being reduced; so, in theory, that should prove to be a benefit to the cotton industry. But supposing that in the second week of August—when the Cotton Bureau in America issues its report—there is a surplus of cotton in the world and cotton prices come down? What will the Chancellor do? Will he chase down his D level or leave it where it is and put his finances out of order—the ones which he has been trying to explain that he needs so badly?
The whole thing was never scientifically conceived and I am afraid that he will be bitterly disappointed before the end of the financial year at the amount of his receipts of Purchase Tax from textiles. We shall be relentless in our insistence on the removal of Purchase Tax from a consumer goods industry which is in the middle of a slump, because Lancashire and Yorkshire need all the assistance they can get and we shall not be satisfied until we get Purchase Tax removed.

Amendment agreed to.

Further Amendments made: In page 88, line 44, leave out"(b) of Class B material," and insert:



per sq.
yd.


(b) of Class C material
6
0


(c) of Class B material of a weight per square yard, exclusive of non permanent loading, of not less than 6 ozs., other than Class C material
6
0


(d) Class B material not of such a weight as aforesaid, other than Class C material.

In line 48, after "material," insert:



per sq.
yd.


"of a weight per square yard, exclusive of non-permanent loading, of not less than 6 ozs., other than Class C material
6
0


(d)of Class B material not of such a weight as aforesaid."

—[Mr. R. A. Butler.]

Mr. Rhodes: I beg to move, in page 89, to leave out lines 13 to 15, and to insert:


9.
Filled quilts—feather, down or cotton and wool:




per article.



(a) not less than 53" in width
4
15
0



(b) less than 53" in width
4
0
0


10.
Filled quilts—kapok or cotton wadded:






(a)not less than 53" in width
2
10
0



(b)less than 53" in width
2
0
0


11.
Blanket (quilted) quilts
3
15
0


I heard the Chancellor's remarks about the assistance that was given by us on the question of furnishing fabrics. We were very willing to co-operate with him on the matter because furnishing fabrics stood out as one of the most badly hit of all the items in the Schedule. This little industry has been very badly hit. What has happened is that, in spite of the recommendations of the Douglas Committee that 50 per cent. should be tax-free and that a median should be found that would do that, I am given to understand that not more than 25 per cent. to 30 per cent. of the products of this industry are tax-free at the present time.
6.15 a.m.
I can quite understand how this situation has arisen. It is because the D scheme, as at present constituted, is a revenue-raising device, and one which has to be put as simply as possible by the Chancellor so that he can get it through the House. To simplify it a lot of grouping was necessary. The whole of the products of the quilt industry were grouped under one heading;

that is, No. 9 in Part II of the Fourth Schedule, at £2 10s. 0d. for cloth not less than 53 inches wide and £2 for cloth less than 53 inches wide. That grouping was unjust, and I would point out that, apart from consideration of the D level, under the old Utility scheme there were five classes.
Those classes were down and feather and down filled quilts, wool filled quilts, kapok filled quilts, cotton wadded quilts, and blanket wadded quilts. It is impossible to condense these five classes into one class and to be fair. In the time at their disposal, the quilt manufacturers have tried to condense them and to come to an understanding with the Treasury. I will try to show why the five categories cannot be condensed into fewer than three.
Each of the categories needs different treatment. Manufacture is different, the equipment needed is different, the labour which has to be put into the several classes is different. There is a difference in the price levels of the material to be put into the quilts, and the material requires more handling in some cases than in others.
I suggest that the Chancellor of the Exchequer should meet us on the lines suggested in the Amendment. We put together the down and feather and down filled quilts and the wool filled quilts, not because they are similar in method of manufacture, but because they are comparable in price. Then come the kapok filled quilts and the cotton wadded quilts, for the same reason. There are different methods of manufacture, but the prices are about the same. Our third category is the blanket filled quilt.
These goods are made for pretty well every family in the country. One of the largest manufacturers of down quilts is the C.W.S., and its manager is the chairman of the Quilt Manufacturers' Association. I must thank the Financial Secretary for his courtesy in receiving the quilt manufacturers and myself to discuss this matter. During the debate on the Schedule earlier, a promise was made that this ridiculous and unfair position would be looked at again. Apparently there was not enough time for a favourable conclusion to be reached between the time when the promise was made and when we saw the Financial Secretary. However, I hope that by now he is in a


position to say something of a favourable nature.
I shall be candid about the figures for the D level. I cannot sincerely back them to the hilt as being strictly a fair D level, but they are figures submitted by the manufacturers' association, who consider them to be just. It is up to the Chancellor to come to his own conclusions about the D level for these articles.
I am putting the case for a very hard-hit section of industry. It is having great difficulty. Many factories are nearly closed. Those which are running are having to scour the country for inferior material with which to fill the quilts so that they can sell them at any price in a desperate attempt to get below the D level.
This is not a good thing. I am sure that when the Customs and Excise Department fixed the D levels at £2 10s. and £2 they did not know that this would force many people out of work and out of business and that it would force some part of the industry to debase its quality to the extent that it has had to do. I hope the Chancellor will give a favourable answer, because this is one of the most serious and urgent matters in the Schedule.

Mr. Blenkinsop: I beg to second the Amendment.
I support everything that my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) has said about the range of the Amendment, but I wish to speak in particular about a special type of quilt manufactured in my constituency, the blanket-quilted quilt, which is in a peculiar position. Only three firms in the country manufacture it. It is particularly popular in the industrial areas of the north-east of England and South Wales and in some parts of Scotland. It has been in use for centuries in mining districts and elsewhere.
It acts as a blanket which tucks right over the bed. I see a number of hon. Gentlemen laid out on the benches opposite who might very well be tucked up at this moment. [HON. MEMBERS: "What about hon. Members opposite?"] My hon. Friends do not seem to be so completely recumbent as some hon. Members opposite, but that is purely a matter of opinion. One of the great

advantages of the quilt is that it is large and is made to tuck round the bed, whereas the usual quilt dives off the bed in the middle of the night and one spends half the night chasing it. Another advantage is that it can be washed and used over a long period.
In the early days of Purchase Tax, this type of quilt was subject to tax. The sales of some firms were severely affected, and after representations to my hon. Friend the Member for Ashton-under-Lyne, it was agreed that such quilts should be brought into the Utility scheme. That improved the whole prospects of this small group of firms, and the firm I have in mind was able to open a new factory in my division, employing a large number of hands. Under the D scheme its prospects have been shattered and for the larger sized quilts there is next to no market, because they are now subject to a considerable Purchase Tax. Smaller quilts for single beds are exempt from tax, but they do not constitute as large a part of the trade as the larger quilts commonly used in industrial areas.
This particular firm told me that in September to November of last year they were selling 1,191 of the 70 by 90-inches quilts; in March to May the figure was only 158. There were comparable reductions in the larger size of 80 by 100 inches, which were in September to November some 1,700 and are now down to a mere 131. The larger quilts have been forced off the market. The firm assures me that if this position is to remain the whole prospects of the business are in jeopardy. They cannot hope to carry on merely with the small-sized quilt. Therefore, there is a real and serious problem, which could be solved by the adoption of the levels proposed in the Amendment.
It seems extraordinary that, while under the D scheme the smaller blanket quilt is exempt, exactly the same quality of cloth for the double bed is not exempt. That seems a fantastic and absurd anomaly. I urge the hon. Gentleman to consider this real problem of many of our constituencies.

6.30 a.m.

Mr. W. T. Williams: I hope the reply of the Financial Secretary will not be the usual disingenuous plea that this is born of the last Government, because it is a baby


entirely fathered by this Government. I have a feeling that the problem facing many of us who have listened to the hard answers given from the Treasury Bench is to decide whether the Government exist to ensure that the country's interests are best served, or whether the country exists to ensure that the Chancellor has his Budget surplus.
I hope that the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) will have persuaded the Chancellor that here is a case in which he might be generous. My hon. Friend spoke in some detail about one of the two things of which I wish to speak. I would remind the Financial Secretary again of his comment about not permitting general grading in this section because of the differences which exist between the work and the material which go into the making of these three different types of quilt.
I should like to speak about the D level because, after all, the effect of the D scheme on this industry has been pretty well disastrous already. It cannot be otherwise when the D level has been fixed at a point which puts all kapok and cotton wadded quilts over the Utility level and 90 per cent. of the woollen blanket quilts above that level. The effect on the industry has been serious. Factories are already at a standstill or operating at a loss, and we are told it is possible they may never be brought back into the industry.
There has been considerable debasement in quality already. Expensive materials have been bought, but because of the low D level on quilts the industry is seeking where it can to find a cheap field for quilts in order that it may sell them below the D level. With Britain becoming increasingly poorer, when people cannot get coal and have to go to bed to escape the cold they will find that quilts will not enable them to keep warm.
Because of these things, will the Financial Secretary consider the possibility of reversing the categories and spreading them over the three categories for which we have pleaded, and will he raise the D level on quilts?

Mr. Boyd-Carpenter: This matter was debated in Committee and subsequent to

that the hon. Member for Ashton-under-Lyne (Mr. Rhodes) was good enough, with a number of other hon. Members, to bring a deputation from the trade concerned to see me. They raised, as the hon. Member has himself raised today, a rather difficult point on the application of the tax to this particular commodity.
As I understand it, the point is whether it is right to apply one particular rate of tax to these articles regardless of the fillings which they contain or whether it is right to break them down, as this Amendment seeks to do, into three separate categories with separate D figures connected with the type of filling put into the article. As the House is aware, it is part of the principle of the D scheme to ensure that the cheaper type of article is clear of tax but that the tax begins to apply at the middle point in cost and rises gradually on the more expensive articles. Perhaps it is the clash between those two considerations that has given rise to the difficulties to which the hon. Member for Ashton-under-Lyne has referred.
As to the effect on the industry, to which several hon. Members have referred, when an industry finds itself facing certain problems it is always difficult in these matters to make sure whether those problems are attributable to the tax or to some quite other factors, or indeed, in some degree at any rate, to some uncertainty as to the future of the tax. It is certainly the case that where there is some genuine doubt about future arrangements for a tax of this sort buyers hold back because they are afraid of being left with stocks on which a different rate of tax might be imposed.

Mr. Blenkinsop: Surely where there is clear evidence that one range of articles is still relieved of tax and the sales are fully maintained and other ranges of goods are subject newly to tax and the sales go down to practically nothing, there is a clear case that the tax has had a disastrous effect upon the industry.

Mr. Boyd-Carpenter: Not perhaps as clear as the hon. Member thinks, because it follows that some of the articles which are free of tax are the cheaper articles: and it may be that for some reason the demand is attached to the articles which are cheaper. Although I agree that it is some evidence, I do not think it is as clear a case as the hon. Member believes.

Mr. Blenkinsop: But in addition to that fact, there is the size factor as well—which makes it clear that it is not a question of quality—and buyers buy the larger type of quilt because one is suitable for one type of bed and the other is not.

Mr. Boyd-Carpenter: The hon. Member made that point in his speech, and perhaps it is not necessary for us to repeat either ourselves or each other. All I say is that it is not quite as easy as the hon. Member suggests to isolate the tax factor from the price factor in forming a fair view of developments.

Mr. J. Edwards: The House would like to know whether the Financial Secretary can tell us which of the quilts are at present free of tax and what proportion that is of the total number of quilts. If we had that information, we could have some idea of the size of the problem.

Mr. Boyd-Carpenter: As the hon. Member will see from the terms of the Schedule, those free of tax are below the D figures concerned in this Amendment and those above are subject to tax. Though he could not have known it, the hon. Member, however, has rightly anticipated something that I was going to say.
I mentioned that the hon. Member for Ashton-under-Lyne was good enough to bring a deputation to see me. They raised a number of these very points and they have been good enough subsequently to submit in writing an amplification of what they then said. At the moment we are examining the details which they submitted. It may well be—I think it is probably the case—that further information will be required. For that reason, it is quite impossible for me to say anything very definite at this stage this morning.
My right hon. Friend the Chancellor, on the Committee stage, indicated our willingness to look into this matter and to receive evidence which anybody wished to submit. That invitation has been followed up to some extent during the last few days, as the hon. Member for Ashton-under-Lyne is aware. Therefore, it is impossible for me to say anything very definite other than that we are considering, as we always do, representations and evidence submitted to us on the manifold problems which arise in this

case. I cannot anticipate what the result of that examination will be.
Some of the evidence is in process of being submitted, and it is for that reason that it is impossible to answer the type of question the hon. Member for Brighouse and Spenborough (Mr. J. Edwards) was intending to put. I can assure hon. Members that we are giving this problem a sympathetic examination and are prepared fully and fairly to weigh the evidance submitted.

Mr. J. Edwards: I think the Financial Secretary correctly stated one of the issues, although I do not think he disposed of it. We feel that the industry cannot be treated as one entity and that it ought not to be. It consists of five classes, producing at least three main types of goods. I do not know whether the President of the Board of Trade has any opportunity to look into this industry, but if he has he will confirm what I have said. If he goes to his Departmental officials concerned, I am certain they will confirm, having had abundant experience of the Utility programme, that the categories are clear and distinct.
I should like the Financial Secretary to address himself to the question whether the figure put down in the Schedule is a fair one. When I asked what was a fairly obvious question, he gave me a reply which was no answer at all, and merely told me that if it were below the D level, it was free of tax. I think he overlooked one or two things which have already been said, namely, that the D level has been fixed at a figure which puts out all previous Utility down, down and feather quilts, and all wool quilts, and places out 90 per cent. of the blanket quilted quilts.
A further thing which the Financial Secretary either does not know or did not think worth telling us is that the greater part of the industry's production is concerned with the manufacture of down quilts. It is because of that, I submit, that the figures are manifestly unfair. If that is so and if the Utility wholesale price of a down quilt ranged from 11s. 5d. to 85s. 1d. for the full bed size, it is manifestly clear that a D level of 50s. 0d. is quite ridiculous. If one takes the wool quilts, where the corresponding prices were 97s. 7d. to 88s. 11d., again it is equally clear, as it is if one takes the


blanket quilted quilts, where the prices were 118s. 5d. and 63s. 5d., that the D level is ridiculous. In other words, the great bulk of this industry's production is well above the level which has been fixed for the D scheme.
I would say to the Chancellor very seriously that he just cannot treat this industry on the basis of a single category and that he is doing it a great injustice if he fixes the D level at this point. I therefore urge him to accept this Amendment as an honest attempt to set down

what we think was a fair scheme. The figures may not be precisely right, but we think they are broadly right having regard to the fact that quilts cannot be treated just as quilts; they must be divided into at least three kinds of quilts. I hope that even at this late hour the Chancellor will accept this point.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 194; Noes, 185.

Division No. 180.]
AYES
[6.44 a.m.


Allan, R. A. (Paddington, S.)
Garner-Evans, E. H.
Nabarro, G. D. N


Alport, C. J. M.
Godber, J. B.
Nicholls, Harmar


Amery, Julian (Preston, N.)
Gomme-Duncan, Col. A.
Nicolson, Nigel (Bournemouth, E.)


Anstruther-Gray, Major W. J.
Gough, C. F. H.
Nield, Basil (Chester)


Ashton, H. (Chelmsford)
Graham, Sir Fergus
Noble, Cmdr. A. H. P.


Assheton, Rt. Hon. R. (Blackburn, W.)
Harris, Frederic (Croydon, N.)
Oakshott, H. D.


Astor, Hon. J. J. (Plymouth, Sutton)
Harris, Reader (Heston)
Odey, G. W.


Baldwin, A. E.
Harrison, Col. J. H. (Eye)
Ormsby-Gore, Hon. W. D.


Banks, Col, C.
Harvey, Ian (Harrow, E.)
Orr, Capt. L. P. S.


Barber, A. P. L.
Hay, John
Osborne, C.


Barlow, Sir John
Heath, Edward
Partridge, E.


Baxter, A. B.
Higgs, J. M. C.
Peto, Brig. C. H. M.


Beamish, Maj. Tufton
Hill, Dr. Charles (Luton)
Peyton, J. W. W.


Beach, Maj. Hicks
Hinchingbrooke, Viscount
Pickthorn, K. W. M.


Bell, Philip (Bolton, E.)
Holland-Martin, C. J.
Pilkington, Capt. R. A


Bell, Ronald (Bucks, S.)
Hollis, M. C.
Pitman, I. J.


Bennett, F. M. (Reading, N.)
Hope, Lord John
Powell, J. Enoch


Birch, Nigel
Hopkinson, Henry
Price, Henry (Lewisham, W.)


Bishop, F. P.
Horobin, I. M.
Profumo, J. D.


Boothby, R. J. G
Horsbrugh, Rt. Hon. Florence
Raikes, H. V.


Bossom, A. C.
Howard, Greville (St. Ives)
Rayner, Brig. R.


Boyd-Carpenter, J. A.
Hudson, Sir Austin (Lewisham, N.)
Redmayne, E.


Boyle, Sir Edward
Hutchinson, Sir Geoffrey (Ilford, N.)
Remnant, Hon. P.


Braine, B. R.
Hutchison, Lt.-Com Clark (E'b'rgh W.)
Roberts, Peter (Heeley)


Bromley-Davenport, Lt.-Col. W. H.
Hyde, Lt.-Col. H. M.
Rodgers, John (Sevenoaks)


Brooke, Henry (Hampstead)
Johnson, Eric (Blackley)
Roper, Sir Harold


Brooman-White, R. C.
Jones, A. (Hall Green)
Ropner, Col. Sir Leonard


Browne, Jack (Govan)
Kaberry, D.
Russell, R. S.


Buchan-Hepburn, Rt. Hon P. G. T.
Kerr, H. W. (Cambridge)
Ryder, Capt. R. E. D.


Bullard, D. G.
Lambert, Hon. G.
Salter, Rt. Hon. Sir Arthur


Burden, F. F. A.
Lambton, Viscount
Schofield, Lt.-Col. W. (Rochdale)


Butcher, H. W.
Lancaster, Col. C. G.
Simon, J. E. S. (Middlesbrough, W.)


Butler, Rt. Hon. R. A. (Saffron Walden)
Legge-Bourke, Maj. E. A. H.
Smiles, Lt.-Col. Sir Walter


Carr, Robert (Mitcham)
Legh, P, R. (Petersfield)
Smithers, Peter (Winchester)


Carson, Hon. E.
Lindsay, Martin
Soames, Capt. C.


Cary, Sir Robert
Linstead, H. N.
Speir, R. M.


Channon, H.
Lloyd, Maj. Guy (Renfrew, E.)
Stanley, Capt. Hon. Richard


Clarke, Col. Ralph (East Grinstead)
Lockwood, Lt.-Col. J. C.
Stevens, G. P.


Cole, Norman
Longden, Gilbert (Herts, S.W.)
Storey, S.


Conant, Maj. R. J. E.
Lucas, Sir Jocelyn (Portsmouth, S.)
Strauss, Henry (Norwich, S.)


Cooper, Sqn. Ldr Albert
Lucas, P. B. (Brentford)
Studholme, H. G.


Cooper-Key, E. M.
Lucas-Tooth, Sir Hugh
Summers, G. S.


Cranborne, Viscount
McAdden, S. J.
Sutcliffe, H.


Crookshank, Capt. Rt. Hon. H. F. C.
Macdonald, Sir Peter (I. of Wight)
Taylor, Charles (Eastbourne)


Crosthwaite-Eyre, Col. O. E.
Mackeson, Brig. H. R.
Taylor, William (Bradford, N.)


Crouch, R. F.
McKibbin, A. J.
Thomas, Rt. Hon. J. P. L. (Hereford)


Crowder, Petre (Ruislip—Northwood)
McKie, J. H. (Galloway)
Thomas, P. J. M. (Conway)


Darling, Sir William (Edinburgh, S.)
Macmillan, Rt. Hon. Harold (Bromley)
Thompson, Kenneth (Walton)


Deedes, W. F.
Macpherson, Maj. Niall (Dumfries)
Thompson, Lt.-Cdr. R. (Croydon, W.)


Digby, s. Wingfield
Maitland, Patrick (Lanark)
Thorneycroft, Rt. Hn. Peter (Monmouth)


Donaldson, Cmdr C. E. McA
Manningham-Buller, Sir R. E.
Thornton-Kemsley, Col. C. N


Doughty, C. J. A.
Markham, Major S. F.
Tilney, John


Drayson, G. B.
Marples, A, E.
Touche, Sir Gordon


Duncan, Capt. J. A. L.
Marshall, Douglas (Bodmin)
Tweedsmuir, Lady


Eccles, Rt. Hon. D. M.
Marshall, Sir Sidney (Sutton)
Vane, W. M. F.


Eden, Rt. Hon. A.
Maudling, R.
Vaughan-Morgan, J. K.


Fell, A.
Maydon, Lt.-Comdr. S. L. C
Vosper, D. F.


Fisher, Nigel
Medlicott, Brig. F.
Wakefield, Edward (Derbyshire, W.)


Fleetwood-Hesketh, R. F.
Mellor, Sir John
Wakefield, Sir Wavel (Marylebone)


Fletcher-Cooke, C
Morrison, John (Salisbury)
Walker-Smith, D. C.


Foster, John
Mott-Radclyffe, C. E.
Ward, Hon. George (Worcester)




Ward, Miss I. (Tynemouth)
Williams, Gerald (Tonbridge)
Wood, Hon. R.


Waterhouse, Capt. Rt. Hon C.
Williams, Sir Herbert (Croydon, E.)



Webbe, Sir H. (London &amp; Westminster)
Williams, R. Dudley (Exeter)
TELLERS FOR THE AYES:


Wellwood, W.
Wills, G.
Mr. Drewe and


While, Baker (Canterbury)
Wilson, Geoffrey (Truro)
Mr. T. G. D. Galbraith.




NOES


Acland, Sir Richard
Gaitskell, Rt. Hon H T. N
Padley, W E


Adams, Richard
Gibson, C. W.
Paling, Will T. (Dewsbury)


Albu, A. H.
Glanville, James
Pannell, Charles


Allen, Scholefield (Crewe)
Gordon Walker, Rt. Hon. P. C.
Pargiter, G. A


Attlee, Rt. Hon. C. R.
Greenwood, Anthony (Rossendale)
Paton, J.


Awbery, S. S.
Grey, C. F.
Pearson, A.


Bacon, Miss Alice
Griffiths, David (Rother Valley)
Peart, T. F.


Baird, J.
Griffiths, William (Exchange)
Plummer, Sir Leslie


Bence, C. R.
Grimond, J.
Popplewell, E.


Benn, Wedgwood
Hale, Leslie (Oldham, W.)
Price, Joseph T. (Westhoughton)


Benson, G.
Hall, John (Gateshead, W.)
Price, Philips (Gloucestershire, W.)


Beswick, F.
Hamilton, W. W
Proctor, W. T.


Bing, G. H. C.
Hannan, W.
Rankin, John


Blackburn, F.
Hargreaves, A.
Reid, Thomas (Swindon)


Blenkinsop, A.
Hayman, F. H.
Rhodes, H.


Blyton, W. R.
Healey, Denis (Leeds, S.E.)
Robens, Rt. Hon. A


Boardman, H.
Henderson, Rt. Hon A. (Rowley Regis)
Roberts, Albert (Normanton)


Bottomley, Rt. Hon. A. G
Herbison, Miss M.
Roberts, Goronwy (Caernarvonshire)


Bowden, H. W.
Hobson, C. R.
Robinson, Kenneth (St. Pancras, N.)


Braddock, Mrs. Elizabeth
Holt, A. F
Rogers, George (Kensington, N.)


Brockway, A. F.
Houghton, Douglas
Ross, William


Brook, Dryden (Halifax)
Hoy, J. H.
Schofield, S. (Barnsley)


Broughton, Dr. A. D. D.
Hudson, James (Ealing, N.)
Shinwell, Rt. Hon E.


Brown, Rt. Hon. George (Belper)
Hughes, Cledwyn (Anglesey)
Short, E. W.


Burton, Miss F. E.
Hughes, Emrys (S. Ayrshire)
Shurmer, P. L. E.


Butler, Herbert (Hackney, S.)
Hughes, Hector (Aberdeen, N.)
Silverman, Julius (Erdington)


Callaghan, L. J.
Hynd, H. (Accrington)
Simmons, C. J. (Brierley Hill)


Castle, Mrs. B. A.
Hynd, J. B. (Attercliffe)
Slater, J.


Chapman, W. D.
Irving, W. J. (Wood Green)
Snow, J. W.


Chetwynd, G. R.
Jay, Rt. Hon. D. P. T.
Sorensen, R. W


Clunie, J.
Jenkins, R. H. (Stechford)
Sparks, J. A.


Collick, P. H.
Jones, David (Hartlepool)
Stewart, Michael (Fulham, E.)


Corbet, Mrs. Freda
Jones, Frederick Elwyn (West Ham, S.)
Swingler, S. T.


Craddock, George (Bradford, S.)
Jones, Jack (Rotherham)
Taylor, John (West Lothian)


Crossman, R. H. S.
Jones, T. W. (Merioneth)
Taylor, Rt. Hon. Robert (Morpeth)


Daines, P.
Keenan, W.
Thomas, David (Aberdare)


Dalton, Rt. Hon. H.
King, Dr. H. M.
Thomas, George (Cardiff)


Darling, George (Hillsborough)
Lee, Frederick (Newton)
Thomas, Iorwerth (Rhondda, W.)


Davies, A. Edward (Stoke, N.)
Lever, Leslie (Ardwick)
Ungoed-Thomas, Sir Lynn


Davies, Ernest (Enfield, E.)
Lewis, Arthur
Wallace, H. W


Davies, Harold (Leek)
Lindgren, G. S.
Watkins, T. E.


Davies, Stephen (Merthyr)
MacColl, J. E.
Weitzman, D.


de Freitas, Geoffrey
McGovern, J.
Wells, Percy (Faversham)


Deer, G.
McInnes, J.
Wells, William (Walsall)


Delargy, H. J.
McKay, John (Wallsend)
West, D. G.


Dodds, N. N.
McLeavy, F.
Wheatley, Rt. Hon John


Donnelly, D. L.
MacPherson, Malcolm (Stirling)
White, Mrs. Eirene (E. Flint)


Dugdale, Rt. Hon. John (W. Bromwich)

Whiteley, Rt. Hon. W.


Ede, Rt. Hon. J. C.
Mallalieu, J P. W. (Huddersfield, E.)
Wigg, George


Edwards, John (Brighouse)
Mann, Mrs. Jean
Willey, Frederick (Sunderland, N.)


Evans, Albert (Islington, S.W.)
Manuel, A. C.
Willey, Octavius (Cleveland)


Evans, Edward (Lowestoft)
Mayhew, C. P.
Williams, Rev. Llywelyn (Abertillery)


Evans, Stanley (Wednesbury)
Mitchison, G. R.
Williams, Ronald (Wigan)


Ewart, R.
Moody, A. S.
Williams, W. R. (Droylsden)


Fernyhough, E.
Morley, R.
Williams, W. T. (Hammersmith, S.)


Field, W. J.
Mort, D. L.
Wilson, Rt. Hon. Harold (Huyton)


Finch, H. J.
Moyle, A.
Winterbottom, Ian (Nottingham C.)


Fletcher, Eric (Islington, E.)
Mulley, F. W
Wyatt, W. L.


Foot, M. M.
Murray, J. D
Yates, V. F.


Forman, J. C.
Nally, W.
Younger, Rt. Hon. K


Fraser, Thomas (Hamilton)
Noel-Baker, Rt. Hon. P. J



Freeman, John (Watford)
Orbach, M.
TELLERS FOR THE NOES:


Freeman, Peter (Newport)
Oswald, T
Mr. Wilkins and Mr. Royle.

Mr. Boyd-Carpenter: I beg to move, in page 89, line 49, at the end, to insert:

PART III

MODIFICATIONS OF PARTS I AND II OF SCHEDULE FOR INITIAL PERIOD

1.—(1) As respects the period up to the end of the thirteenth day of May, nineteen hundred and fifty-two, Part I of this Schedule shall be modified as follows.


(2)In the division relating to men's or boys' wear, for paragraph 19 there shall be substituted the following paragraph:—


"19. Boots and bootees:


(a) articles which are either unlined or lined only with cotton fabric or leather, and are not made wholly or partly of fur or imitation fur
3
0
0
per pair



(1
10
0
per article)


(b) articles of any other description
2
0
0
per pair



(1
0
0
per article)."


and in paragraph 21 for the amounts specified in the second column there shall be substituted 15s. 0d. per pair (7s. 6d. per article).


(3)In the division relating to women's or girls' wear, for paragraph 22 there shall be substituted the following paragraph:—


"22. Boots and bootees:

(a)articles which are either unlined or lined only with cotton fabric or leather, and are not made wholly or partly of fur or imitation fur
3
0
0
per pair



(1
10
0
per article)


(b) articles of any other description
1
17
0
per pair




(18
6
per article)."


(4)In the division relating to women's or girls' wear, the following substitutions shall be made in the amounts specified in the second column:—


(a) in sub-paragraph (a) of paragraph 1, for £12 0 0 substitute £6 10 0;


(b) in sub-paragraph (b) of paragraph 3, for £8 0 0 substitute £4 0 0;


(c) in sub-paragraph (a) of paragraph 4, for £4 10 0 substitute £1 0 0;


(d)in paragraph 27, for £4 10 0 substitute £1 0 0.


2.—(1) As respects the period up to the end of the second day of June, nineteen hundred and fifty-two, Part II of this Schedule shall be modified by substituting 4s. 0d. per sq. yd. for 6s. 0d. per sq. yd. in the second column in sub-paragraphs (b) and (c) of paragraph 1, sub-paragraphs (b)and (c) of paragraph 3 and sub-paragraph (c) of paragraph 4.


(2) As respects the period beginning with the third day of June, nineteen hundred and fifty-two, and ending with the seventeenth day of that month the said Part II shall also be modified by inserting in sub-paragraph (6) of paragraph 1 and in sub-paragraph (b) of paragraph 3 after the words "Class C material "the words" of a weight per square yard, exclusive of non-permanent loading, of not less than 6 ozs.", and by omitting in sub-paragraph (d) of those paragraphs the words "other than Class C material".

This is a consequential Amendment to that moved by my right hon. Friend in page 11, line 33. It makes detailed interim arrangements for the tax in respect of those articles on which tax has been varied during the consideration of the Bill.

Amendment agreed to.

Ninth Schedule.—(EXCESS PROFITS LEVY; MODIFICATION OF PROFITS TAX RULES AS TO COMPUTATION OF PROFITS.)

Amendments made: In page 105, line 2, after "elects," insert" paragraph (a) of."

In page 105, line 3, after "paragraph," insert:
and the corresponding part of paragraph (c) of that sub-paragraph."—[Mr. Maudling.]

Mr. Maudling: I beg to move, in page 106, line 1, to leave out from "If," to the second "the," in line 3.
When my right hon. Friend saw this Amendment in the name of my hon. Friend the Member for Altrincham and Sale (Mr. Enroll), he decided to accept it, and also placed on the Paper the Amendment in page 120, line 23, to leave out paragraph 5, which is consequential.
The effect of these Amendments is, briefly, that a taxpayer is given the right to elect whether the annual allowances in connection with mines and oil wells should be taken into account or ignored for the purposes of the E.P.L. As the Bill stands, the taxpayer has to exercise the right of election within 12 months of the end of the first accounting period, and these Amendments give him the right of election within 12 months of the end of the E.P.L. period. As the Bill stands, the taxpayer is asked to make what is rather a leap in the dark, and we consider that


it would be fair to him that we should accept this Amendment, and that in page 120, line 23.

Amendment agreed to.

Further Amendment made: In page 106, line 11, at end, insert:
(3) An election under sub-paragraph (2) of this paragraph shall be made either—

(a) within twelve months from the end of the first chargeable accounting period of the body corporate or such longer period as the Commissioners may in their discretion allow; or
(b)within twelve months from the end of the period of charge to the excess profits levy or such longer period as the Commissioners may in their discretion allow;

and any election made under paragraph (a)of this sub-paragraph may be withdrawn by notice in writing to the Commissoners within the period mentioned in paragraph (b)of this sub-paragraph; and all such assessments, additional assessments, reductions of assessments and repayments of tax shall be made as are necessary to give effect to an election made under paragraph (b) of this sub-paragraph or to the withdrawal of an election made under paragraph (a) thereof.—[Mr. Maudling.]

Mr. Maudling: I beg to move, in page 106, line 15, at the end, to insert:
5.—(1) Where the standard profits for a full year of a body corporate whose trade or business consists wholly or mainly in the ownership or operation of ships fall to be calculated by reference to its profits for the standard years, and in computing those profits a deduction is made under paragraph 1 of Part I of the Eighth Schedule to the Finance Act, 1947, on account of any annual allowance made for income tax purposes in respect of any of its ships, then if—

(a) the body corporate has made an election under paragraph 2 of Part I of the Sixth Schedule to the Finance Act, 1949, or section two hundred and eighty-two of the Income Tax Act, 1952 (which provide for an alternative method of calculating annual allowances); and
(b) by reason of the operation of paragraph (6) of Rule 6 of the Rules applicable to Cases I and II of Schedule D or of section two hundred and eighty-eight of the Income Tax Act, 1952 (which restrict the making of annual allowances) any deduction which, in computing the body corporate's profits or loss for a chargeable accounting period, would otherwise fall to be made as aforesaid in respect of that ship is not made or is reduced,

an additional deduction shall be made under the said paragraph 1, in computing the body corporate's profits or loss for that chargeable accounting period, of an amount equal to the difference between the deduction (if any) so made in respect of that ship and the deduction which would have been so made in respect of that ship but for the operation of the said

paragraph (6) or the said section two hundred and eighty-eight:
Provided that—

(i) where the deduction made in respect of that ship in computing the said profits for the standard years is itself reduced by reason of the operation of the said paragraph (6), the additional deduction shall be reduced in the same proportion; and
(ii) where the body corporate has made an election under paragraph (a) of subsection (4) of section thirty-six of this Act, the additional deduction shall be calculated, under the preceding provisions of this paragraph, as if the year specified in the election were not a standard year and shall then be halved.

(2) In relation to a body corporate which is a member of a group within the meaning of the Twelfth Schedule to this Act, the reference to this paragraph to an election under paragraph (a)of subsection (4) of section thirty-six of this Act shall be construed as a reference to an election made under paragraph (a) of sub-paragraph (4) of paragraph 9 of the said Twelfth Schedule and the first reference in this paragraph to its profits for the standard years shall be construed as a reference to its share in the composite figure determined under sub-paragraph (1) of the said paragraph 9.
Although this Amendment appears long and complicated, it deals only with a relatively narrow point, but one which is of great importance to the shipping industry. My hon. Friend the Member for Bodmin (Mr. D. Marshall) has pointed out that their depreciation allowances are normally calculated on what is known as the "straight line" basis and that, in the case of the shipping industry, there are a number of valuable ships whose depreciation allowance might wholly expire in between the beginning of the standard period and the end of the chargeable period. In such cases obviously the shipping company concerned might be called upon to pay Excess Profits Levy merely by reason of the fact that the depreciation charge on a particular ship had expired in the interim.
7.0 a.m.
This Amendment proposes that in the chargeable period the same depreciation allowance shall be given in the case of a ship with depreciation on the straight line method as is given in the standard period, thus ensuring a proper comparison between the profits of a standard period and the profits of a chargeable period.

Amendment agreed to.

Mr. Maudling: I beg to move, in page 107, line 18, to leave out "the standard period," and to insert "a standard year."
This Amendment is consequential upon the change in the standard period whereby, instead of having a consecutive period of three years, there is to be a choice of two out of three years.

Amendment agreed to.

Further Amendment made: In page 109, line 10, after "year," insert:
and as if for 'two years' there were substituted ' one year'."—[Mr. Maudling.]

Mr. D. Marshall: I beg to move, in page 109, line 13, at the end, to insert:
(iii) a body corporate whose trade or business consists wholly or mainly in the ownership or operation of ships, may within twelve months from the commencement of the first chargeable accounting period of the trade or business or such longer period as the Commissioners may in their discretion allow, by notice in writing to the Commissioners, elect that the provisions of this paragraph shall apply, notwithstanding that a requirement was made for excess profits tax purposes under paragraph (a) of subsection (1) of section thirty-seven of the Finance Act, 1946, but relief for such purposes was either not claimed by or not allowed to the body corporate in respect of the full amount of the costs of repairs and renewals deferred until after the end of the period for which the excess profits tax was chargeable.
This is, by nature, a complicated Amendment, dealing with the deferred repairs in relation to the shipping industry. It conforms more or less exactly to the Amendment that was standing on the Order Paper during the Committee stage but which was not selected, and the alterations are designed only to follow exactly the same form of words contained in the Amendment which the Chancellor has just moved with regard to the shipping industry.
Paragraph 11 of the Ninth Schedule, on page 108 of the Bill, makes provision that expenditure on repairs and renewals during the 10 years from 1st January, 1940, to 31st December, 1949, shall be averaged over those 10 years. During the standard years many companies were undertaking arrears of repair work which was deferred during the war years, with the result that the actual expenditure in the years 1947-1949 was much larger than normally would be the case. Consequently the profits of those standard years would have been artificially de-

pressed; but it must be remembered that the shipping industry, of all industries, was perhaps most affected by those years.
Not only did the ships themselves have to run in the vital needs of this country during the war, so that repairs could not be done at that time, but immediately after the war the repair yards were full, dealing with these very necessary ships in order to get our Mercantile Marine once more on a proper basis, and so the repairs could not be done then. In consequence of that, the actual amount of repairs during that period of years when they were carried out would naturally be excessive.
The point I wish to make here is that during the E.P.T. period nearly all the ships in our Mercantile Marine were either requisitioned by the Government or were operating under controlled rates of freight, so that the industry was subject to either a very low E.P.T. or no E.P.T. at all. In consequence it was only necessary for those companies which were liable to E.P.T. to allocate a portion of their repairs in order to wipe out the E.P.T. position altogether. [Interruption.] This is an important point, and no hon. Member can suggest that in our invisible exports shipping is not a great factor.
I want to point out to the Parliamentary Secretary to the Ministry of Civil Aviation that the effect of paragraph 11 (b) is to exclude those companies which, although still having large amounts of deferred repairs, have not in fact identified them. The Minister may argue that identification of those repairs can now take place; but that is an impossible task because the ship repairers at that time—and it is a long time ago now—in a number of cases did not itemise these amounts, nor apportion these charges so as to eliminate from them the cost of work.
I suggest that if the Minister cannot accept the Amendment which is on the Paper, he can at least assure the House that the principle which this Amendment contains will be agreed by him so that this matter of substance can be adjusted, and the shipping companies in these circumstances can have a choice based on a standard profit from which has been eliminated any charge for repairs in excess of the average.

Colonel Sir Leonard Ropner: I beg to second the Amendment.
This Schedule provides mechanism by which profits are to be calculated for the purpose of assessing the amount payable under the Excess Profits Levy. Paragraph 11 of the Ninth Schedule is intended to provide a comparatively simple method of determining the amount which may be fairly charged against the profit of the standard years on account of repairs and renewals. I know that paragraph 11, as it has been drafted, is a genuine attempt to frame a formula which, in its application, will be fair to all concerned and easy to operate. Unfortunately, it does not succeed in this. Unless this Amendment is accepted, special and peculiar difficulties will be faced by the shipping industry.
I think I ought to make it clear that to the best of my belief—perhaps I ought to add, to the best of my understanding—the addition of these words to this paragraph will not cost the Exchequer anything, nor will it have the result of the shipping industry gaining financially. On the other hand, if the Amendment is accepted it will greatly simplify the work involved in determining the standard of profit of many shipping companies. This relief would surely be welcomed not only by the shipping companies but by the already over-worked staff of the Board of Inland Revenue.
The difficulty which it is desired to remove arises from the fact that paragraph 11 (b) as it stands has the effect of preventing many shipping companies from applying the remaining provisions of paragraph 11 because a technical requirement was made for E.P.T. purposes under Section 37 (1, a) of the Finance Act, 1946. It may be said that that is precisely what is intended, but the matter is not so easily disposed of. The reason the shipping industry desires this purely administrative concession will be made clear if I give an example of the sort of difficulties which will arise if the Chancellor cannot accept the Amendment.
Subsequent to the war, the ships of many liner companies were re-converted from troop-carrying to peace-time purposes, and during the process of re-conversion both deferred repairs and alterations and improvements were carried out on these ships simultaneously. At that time and in such cases the cost

involved in respect of deferred repairs was often such a high percentage of the total amount expended on the ships that neither the companies nor the Board of Inland Revenue took much trouble, if any, in assessing the precise amount attributable to deferred repairs.
All that was needed then was to satisfy both the Board of Inland Revenue and the companies that the cost of deferred repairs was sufficient to extinguish E.P.T. liability if such was the case. In extreme cases, but cases which were not uncommon, the cost of the deferred repairs on one ship of a fleet was sufficient to extinguish the E.P.T. liability of all the ships of the fleet.
In the case of a number of ships, therefore, there was no need for the company to give any consideration at all to the question of the separate costing of deferred repairs. There is no doubt that, technically, a requirement was made in all these cases, but it was never necessary to complete the calculations. Even some years ago the calculations would have been extremely laborious, but today they would be even more troublesome, and I honestly think that in a number of cases they would not be possible.
Our proposal would have the effect of extending to shipping companies the opportunities of applying the much simpler mechanism which is defined in paragraph 11.

7.15 a.m.

Mr. Maudling: This is a matter of considerable importance to the shipping industry and I will try to explain a complicated subject.

Mr. A. C. Manuel: In view of the length of the Sitting, I should like to move the Closure.

Mr. Deputy-Speaker (Mr. Hopkin Morris): I could not accept that Motion.

Mr. Maudling: Although this Amendment is not acceptable to the Government, the effect my hon. Friends have in mind can be obtained under paragraph 9 of the Ninth Schedule. At the end of the war, many companies found it necessary to carry out deferred repairs over a period of time that included the standard years. Unless some provision is made to write these back into the war period, it may mean an unfair deduction. In cases where application had been made to write these back for Excess Profit Levy


purposes, the adjustment was made for purposes of Profits Tax in the years 1947, 1948, and 1949, and therefore, for E.P.L. purposes, in the standard period.
The difficulty arises where the application had not been made to write these things back, and in these circumstances provision is made in the Bill for a rule-of-thumb method to be applied, and for allowances for repairs granted in the standard period to be apportioned to two-tenths of the total expenditure of the company on repairs over the period of 10 years from the beginning of 1940 to the end of 1949. This rule-of-thumb method has the disadvantage that it may give a concession to the taxpayer larger than he is entitled to ask for, and therefore it is not possible to extend the method to cases where, in fact, a claim has already been made for wear and tear to be written back.
I can assure my hon. Friends that the particular position and problem of the shipping industry in this matter has been called to the attention of the Government, and it can be met under paragraph 9 of the Ninth Schedule, which provides that expenses which are not properly attributable to a particular year can be written back into the year to which they should be properly attributed. That, in fact, would produce the effect my hon. Friends have in mind, and I hope that after the assurance I have given them—that the particular case they have in mind will be considered under paragraph 9 of the Ninth Schedule—they will be prepared to withdraw their Amendment.

Mr. D. Marshall: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Eleventh Schedule.—(EXCESS PROFITS LEVY: EFFECT OF CERTAIN TRANSFERS OF GOING CONCERNS.)

Amendments made: In page 116, line 44, after second "of," Insert "such."

In line 45, leave out from "deposits," to first" the," in line 47, and insert:
as is mentioned in section fifty-two of this Act.

In page 118, line 29, after second "of," insert "such."

In line 30, leave out from "deposits," to first "the," in line 32, and insert:
as is mentioned in section fifty-two of this Act.

In page 120, line 23, leave out paragraph 5.—[The Solicitor-General.]

Twelfth Schedule.—(EXCESS PROFITS LEVY: INTERCONNECTED BODIES CORPORATE.)

Amendments made: In page 124, line 22, after "commenced," insert "on or."

In page 127, line 41, after" made," insert:
under paragraph (c) of the proviso to subparagraph (6) of this paragraph or.

In page 128, line 37, after "where," insert:
the condition specified in the proviso to subsection (5) of section thirty-six of this Act would be fulfilled, as respects the trades or businesses of all the members of the group, if they were one trade or business of one body corporate and the principal member so elects, or where.

In page 129, line 48, leave out "referred to in paragraph 8,"and insert:
determined under sub-paragraph (1) of paragraph 9.

In page 131, line 25, after first "of," insert "such."

In line 25, leave out from "deposits," to "the," in line 28, and insert:
as is mentioned in section fifty-two of this Act."—[Mr. Boyd-Carpenter.]

Fourteenth Schedule—(REPEALS.)

Amendment made: In page 135, line 37, column 3, at end, insert "the First Schedule."—[Mr. Boyd-Carpenter.]

Bill to be read the Third time this day, and to be printed. [Bill 117.]

Orders of the Day — CRUELTY TO ANIMALS

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Butcher.

7.23 a.m.

Mr. Donald Chapman: It has been very rightly suggested that we should get animals together to sign a petition against cruelty to Members of Parliament. It would be a good thing after what we have just been through.
This is a very serious subject. First, I should like to thank my hon. Friend the Under-Secretary of State for the Home Department for sitting through the night to reply. I shall be raising, I am afraid, many subjects which do not come under his Department at all, but I hope that he will be able to pass on some of the things I have to say to other Departments.
My difficulty is to deal with the enormous wealth of material at my disposal. I propose to restrict myself to dealing with personal cases of cruelty, because I think there is now nothing less than a minor crime wave in respect of cruelty to animals in this country. I do not wish to deal with gin traps and many other things, but personal cases of cruelty which seem to be on the increase.
Our interest and our awareness of this has been heightened by Press articles, Questions in the House, recent legislation, and, particularly—and I want to deal with this before I come to the substance of what I have to say—by some articles last week in the "Manchester Guardian." That newspaper should be congratulated upon the service it did in bringing certain facts to the notice of the public. The articles which concerned the transportation of horses, mainly from Eire, to abattoirs in Paris, exposed a set of circumstances which must make us feel that the question of cruelty to animals and their protection is an international one as well as just one into which we are looking in this country.
The facts which these articles revealed are appalling. Horses were 96 hours in transit without any sleep; and the horse happens to be a very sensitive animal that needs sleep and cannot stand sea sickness on the voyage between Eire and Dieppe. The, appalling conditions in Paris

slaughterhouses and the difficulties en route for the animals are facts which should cause any internationally-minded citizen, or even just an ordinary citizen, to be ashamed that his fellow creatures should permit such cruelties. I hope that the facts revealed here will go out beyond this Chamber, even to other Governments, to show that we, at least, feel that these things are not right and that something should be done about them.
The articles from the "Manchester Guardian" have been reprinted in pamphlet form. The killing of horses in front of the bodies of other horses which are being skinned and have their entrails lying about is something which we are trying to prevent in this country. I trust that it is not too much to hope that we can persuade the French Government to do something about it, too.
A Question was asked in the House some days ago about the illegal killing of horses in this country by stunning them and extracting their blood to make white meat which, as I understand, is sold in more than one Soho restaurant as beef. The "Manchester Guardian" investigation is continuing, and I hope it will bring out more facts which we can take up and upon which we can press the Government to take action.
There is not only that cruelty but the cruelty of the sea crossing imposed upon horses exported from Ireland to England. They are exported in some considerable numbers still. Because of the kind of stomach horses have they are unable to be seasick and that results in blinding headaches. Furthermore, when they arrive in this country, unlike the practice in the case of cattle, there is no regulation that they should have food and 24 hours' rest before they are moved on to other parts of the country.

Mr. Hector Hughes: The whole tenor of my hon. Friend's remarks seems to me to be imputing to the Irish people, more than to any other people, undue cruelty. I hope that he does not intend that.

Mr. Chapman: No, I did not intend that. I have been criticising the French more than anybody so far, and at the moment I am emphasising that the English have no checking facilities at our ports.

Mr. Anthony Greenwood: In the last Parliament we secured very valuable concessions from the United Kingdom Government in respect of horses. The difficulty rested with the Government of Eire.

Mr. Chapman: I am fully aware of that, but there is still a great deal to be checked up. It is true that horses are not as well treated as other animals during importation into this country. I want, however, to come to the substance of what I have to say and to speak of the present crime wave and the evidence that there is a growing number of acts of personal cruelty. I want to suggest to the Government what can be done.
What is the evidence? It is contained in many figures, of which I want to choose a few. If we take the figures known to the R.S.P.C.A., which, incidentally, is doing such good work, as always, the number of complaints received by this Society, and acted upon, was 17,000 in 1945. By 1951, that figure had gone up to 31,000. It had nearly doubled in the last seven years. If we take the figure for actual convictions in the courts, it was 638 in 1945. In 1951, the figure was 939, a 50 per cent. increase. If the figures rise throughout the rest of 1952 as they did in the first four months of this year they will reach 11,000.
In other words, in 1952, the number of convictions for actual cruelty will, more or less, have doubled compared with 1945. That is the evidence. It goes on day after day, and we can read it for ourselves in the newspapers. I want to come to some examples of the shocking cases, which are reported and to the inadequate penalties meted out by magistrates.
In the City of Derby, on 15th June, 1952, a man was fined the "magnificent" sum of 10s. 0d. as the result of cruelty to an animal. The R.S.P.C.A. report runs as follows:
When the Society's inspector visited the accused's house, he found the animal, a fawn and white mongrel bitch, to be in a very emaciated bodily condition. The bitch was unable to rise and could only just move her head and appeared to be on the point of dying. A veterinary surgeon, who examined the carcase, stated that the bitch was very emaciated and he observed that there were no signs of a debilitating disease. In the veterinary surgeon's opinion, the animal's condition was due to starvation over a considerable period of time.

Let me take a second example. An 18-year old youth was fined £20, and ordered to pay £5 costs, for what was one of the most appalling cases the magistrates in New Tredegar had ever known. The defendant took a dog he wanted to get rid of to a pit shaft, 25 feet deep, and made it jump in. After that, he threw heavy stones and metal sheets down the shaft. The dog crept into a narrow passage and defendant left it there. Three days later, he returned and heard the dog whimpering. He did nothing about it, but some days later two men heard the dog whimpering and, with the help of a policeman, got it out of the shaft. The R.S.P.C.A. inspector told the court that the dog was now in a good home, that it was a good dog, about four or five years old, and that except for its emaciated condition was quite healthy.
Last, let me come to one case, which has been in the newspapers recently, where four boys were accused of shooting squirrels up a tree or knocking them down, stabbing them on the ground with a sheath-knife, cutting off their tails, and thinking the whole thing was a funny game. The boys were conditionally discharged and their parents ordered to pay 21s. costs. Anything more ludicrous as a penalty it is hard to imagine. These cases are going on every day, and there are inadequate penalties.
I have brought here some evidence of the kind of thing that the R.S.P.C.A. is finding throughout the country. It is further evidence of this crime wave. This article which I hold in my hand was taken from children in Beverley market. It is a very good instrument for torturing animals. It consists of the middle stay of an umbrella; Members will observe that the handle is still on it. At one end the metal has been squashed and a pen knife blade inserted. The children were caught going round the market digging this into defenceless animals, and they seemed to go particularly for the animals' eyes.
I have another weapon here, consisting of a heavy dart on a piece of string which children were caught throwing at the eyes of calves and such animals. They stick it in, and then pull it out. They think it is an enormous joke. This is the sort of evidence which we can collect as well as the details of cases.


There are weapons of torture as well as simply evidence of cruelty.
What can be done about all this? I have not stressed the figures any more than necessary, because I think it is generally well known that this kind of sadism is on the increase in British life. What can be done? I want to make some suggestions. If we break down the figures of cruelty we find that every year quite consistently the number of convictions boils down to one-quarter or one-third of them being concerned with dogs. Every year the figure runs steadily at that rate; from 25 per cent. to 33⅓ per cent. of the convictions are for cruelty to dogs.
What is really needed is some enforcement of the 1933 Protection of Dogs Act, and I think we are entitled to ask the Home Secretary to draw the attention of magistrates to their powers under this Act. The Act allows magistrates to forbid a person convicted of cruelty to a dog from owning a dog either for a period of years or for life. That is certainly needed, because it is not unknown for some of these worst offenders to commit these offences time and time again. We must prevent them owning animals if the animals' trust in them is misplaced.

The Joint Under-Secretary of State for the Home Department (Sir Hugh Lucas-Tooth): I am not certain whether the hon. Gentleman is suggesting that to his knowledge a number of these cases involve second offences. I have no information on that score, and I should like to know whether the hon. Gentleman is making that suggestion.

Mr. Chapman: I am about to explain that that does sometimes happen, particularly because, as far as I can gather, some of the reports of these cases are not adequately circulated when a convicted person moves about the country. I have no direct evidence. I only gather from people who know more about it than I do that there is no real check on people who are second offenders.
From the point of view of the Protection of Dogs Act, there is some need to compile a register of people who are put on the black list and prohibited from owning dogs. As far as I can make out, if I am prohibited from owning a dog

for 10 years by the local magistrate, there is apparently nothing to prevent me moving to another part of England and purchasing a dog. It is nobody's job to check up whether, in fact, I do own a dog within the period for which I have been prohibited. Something is badly needed to make sure that this Act is not partly a dead letter. Offenders should be checked by some machinery to make sure that they do not escape the law.
There must be some pressure on magistrates to increase the penalties. It is very often cheaper to be cruel now than it was pre-war.' Fines of 10s. are still being imposed for offences for which 10s. fines were imposed before the war. Moreover, there is very great variation in the use of imprisonment as a punishment. If we could have six months' imprisonment for a few of these offenders we should begin to see the crime wave brought under control. Magistrates are failing in their power if they do not imprison some of these offenders.
Let me give examples of how the penalties vary. I take them at random from a list submitted to me by the R.S.P.C.A. There was a case in Don-caster of a cat which was kicked to death, and the man who did it was fined £7, and ordered to pay £8 costs. At Dewsbury a cat was thrown on the fire, and the man was sent to prison for a month. Clearly, both men should have been sent to prison for a month. I am suggesting that the Under-Secretary should circularise magistrates again, pressing them to bring the crime wave under control, and drawing their attention to the fact that imprisonment is possible and that fines should be heavier.
I come to the question of children. I think that here we have to ask the Home Secretary to have an increased watch kept on markets, and to draw local authorities' attention to their power in this respect. If children are caught being cruel to animals in the markets they should be sent out of the markets, and the aid of the police should be enlisted. This is a matter on which we have the right as a community to ask the school teachers to help us. The R.S.P.C.A. provides a lecture service, but that is not enough. We shall have to have more sense of the care of animals inculcated into the children at school, so that this kind of sadism does not become a prac-


tice for exhibition purposes out of school hours.
There is one final point, and that is corporal punishment. I know that the Home Secretary thinks that corporal punishment is not justified for children because the figures of convictions have not gone up in their case, but there is some ground for considering it. It has been a melancholy and a sad task to compile this account of sadism in British life. I hope I have left enough time to enable the Under-Secretary of State to speak of some of the things that can be done about it.

7.43 a.m.

The Joint Under-Secretary of State for the Home Department (Sir Hugh Lucas-Tooth): In the short time available to me it is difficult to give the hon. Gentleman much of an answer. Let me say, first of all, about the questions raised by the recent articles in the "Manchester Guardian," to which the hon. Gentleman referred, that they were, of course, mainly concerned with the traffic in horses between Eire and certain Continental countries. I think that the hon. Gentleman will recognise that there can be no possible responsibility in any Minister in this House for that traffic. No doubt those concerned will note what the hon. Gentleman has said, but there is nothing which I can say in that connection.
So far as the export of horses from England is concerned, the matter was dealt with by an amending Order in 1951. I think that 736 horses altogether were exported from this country; and of those no fewer than 613 were thoroughbred racehorses and similar stock. In fact, only five horses did not come under some clear definition. So I think it can be said that there is no longer any exportation of horses from this country for purposes of slaughter.
There is the question of what has been referred to as a devilish device; the electrical pump to convert horse flesh into what appears to be veal. That was the gist of what has been suggested, both here tonight, and in a leading article in "The Times" yesterday. Here, I should state the law on the subject. Part 5 of the Food and Drugs Act, 1938, rules that all horses must be slaughtered in slaughterhouses or knackers' yards,

which must be licensed by the local authority; and, under the Slaughter of Animals Act, 1933, it is required that animals, including horses, shall be stunned so as to be insensible until death intervenes, or be instantaneously killed. Slaughtermen have to be licensed, and they must use methods and appliances that will cause the least suffering.
The statutory provisions therefore appear to be adequate. But, as has been said tonight, the responsibility for these provisions does not fall on the Home Office; it lies with the Ministry of Housing and Local Government. The problem is not one of the inadequacy of the law, but the practical difficulty of enforcing it. That entails detection of offences, and proof of them.
As regards the broad allegation made concerning this electrical device, the fullest inquiries in the Home Office, and in the Ministry of Housing and Local Government and the Ministry of Food, have failed to disclose any information of this offence at all. So far as the Government is concerned, we have no information that any such offence has been committed; and we have no reason to suppose that any such method of slaughtering horses is being used in the country. Perhaps I might say that the Minister of Food's recent answer to a Question in the House was referring to the "Manchester Guardian" article, and was not intended to be anything more than that.
It is necessary, I think, to refer specifically to a passage in that article because it quotes a statement made by an Irish dealer who was referring to what was being done by another dealer. That, I think, is what the lawyers would term "hearsay evidence." The inquiries which I have made—and I understand that the "Manchester Guardian" has no other evidence about this particular matter, and does not know the name of the dealer who is said to have used this machine—have not proved this charge. In these circumstances, I think that the Government must assume that if this is carried out it must be an isolated case, but, if anyone at all has further evidence, the Government will be only too pleased to have it.
On the more general question, I must say that there is really no indication of any substantial increase in this kind of


crime; or, indeed, of any increase in the degree of cruelty involved. The Government have no evidence of that. I should like to give some very brief statistics. They show that in the 1920's, on an average, some 6,000 prosecutions for cruelty to animals took place annually. In the following decade the average had dropped to 3,000 a year. During the war there was a sharp drop; but I do not want to give the figures for that period, because they are completely vitiated by all sorts of other considerations. In 1945 the number was only 900, as compared with the average of 3,000 in the previous decade. By 1948 the figure had dropped to 846 and in 1951 it had risen again to 1,021.
It is true that there has been that rise, but it is not a very big rise, though I think it is not unfair to say that the recent reduction has not been very great and has been running at an average of just below 1,000. I am not for a moment saying that we should not deplore that fact; but it is quite certain that the amount of cruelty to animals, as shown by these

statistics, has very materially dropped during the last 20 or 30 years.
The hon. Gentleman referred to complaints coming in to the R.S.P.C.A. I suggest that one reason for those complaints—or, possibly, for a large number of them—is the livelier interest on the part of the public, and if that is so it is a good thing that there should be an increase in complaints. I understand that 11,000 oral warnings were given by the R.S.P.C.A. I have no knowledge of the sort of offences in respect of which the warnings were given, but I think it may very well be that a large number of them were due to ignorance and carelessness——

The Question having been proposed after Ten o'Clock on Wednesday evening, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Seven Minutes to Eight o'Clock a.m., Thursday, 19th June.